Do not install Parallels Update ParallelsDesktop-7.0.15104.778994 doesn't work with

Not Parallels or Windows are corrupted in your case - Parallels Tools installation hanged right? Parallels tools it is actually a branch of drivers - video, network, mouse driver etc. which makes Windows to work smoothly on Mac. As installation proceed to 60% - previous PToos were removed i suppose - this is why your Windows looks so strange. You need to make sure all old files are gone and install tools again from the virtual machine menu--> Install PTools. check this kb http://kb.parallels.com/8969
 
Ahmm....I know, I did and nothing changed....downgrading worked and things look more or less like they used to. I use shared disks/folders extensively and this one change essentially bricked Parallels for me so it was in my interest to spend a bit of time to try and get it all back into a working state.

I stand by what I wrote I in the last post.
 
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