Just upgrade to the final version of parrell for mac, and as usual NO SOUND. Have install Parallel TOOLS. Installed tools in safe mode,upon restart error did not show up. But on restart the error shows up again. On startup it says error "writing sound device,using loopback device". In resources it says auto startup,default device . In windows XP it shows Intel for sound devices. But in the bottom right corner where all the devices that parallel has the floppy etc.,sound is muted and when trying to activate sound, always get error "writing sound device,using loopback device". When installing from CD sound works,what gives. Is it the tools or is it Parrallel itself. Are the tools the same as on the CD?
I think it maybe an issue with your Windows installation. Try to do a clean installation of Windows. Always make a backup of your "good" Parallels image so you can always roll back.