As the title says. When I open Parallels, it asks me to select a machine or create a new one. When I select the one that usually starts up automatically, Parallels complains that it is in use in "another Parallels window". This is definitely not the case. Is my VM hosed?
No. Sometimes Parallels leaves a .lock file when it shutsdown. Using terminal go and look where your vm is. If you see a .lock file then delete it and your vm will start ok.
The directory you need to be in is under your user then Libary/Parallels In there you should see a directory for your VM. Change into that. Then do: ls -al ls -a doesn't show it but ls -al will show it. You should see a file (if you are on xp) that looks something like: .winxp.pvs.lock That file can be removed.
