When I look at the configuration editor of my Parallel's virtual machine, the hard drive shows emulation of "use image file", and it shows the path to the hdd file which resides on my mac hd partition. Does that mean it's safe to delete my boot camp partition and add that back to my mac hard drive? Can I be sure that the parallels vm isn't using any of the windows files form the boot camp partition?
If you are pulling everything off of a .hdd file, then yes. As long as you don't have any paths to BootCamp you are safe. If you are nervous, back-up BootCamp then delete it... If anything goes wrong, drop it back on.
How do you make a backup that you can just drop back on? From within finder, just copy my "Windows HD" to my external drive?
Grab a copy of "carbon copy cloner" and make a backup to a dmg file or external drive. This way you get an exact working copy of your whole system. Other utilities like "Super duper" and so on work too. You can even accomplish the same using terminal and unix commands like rsync... Carbon copy cloner and other utilities can be had @ www.versiontracker.com