Shared Folders - wrong (duplicate) volume shown (ver 3.0 5626)

Setup: Running Parallels Desktop for Mac 3.0 build 5626 to run Windows XP on my iMac (OS X 10.5.6).

I already had my home drive on the Mac shared - it shows up as the M: drive on the iMac.

I added a new firewire400 drive to my iMac (formatted as FAT32 from disk utility):
new drive is called EXTDATA on the iMac, and is shared.

Within Parallels, I set up this new drive to be one of the Shared Folders so I can see it under Win XP.

The new drive shows up in Win XP under Parallels as drive z:, but it shows the wrong contents:
it shows what I have in my Mac home directory, the same as the M: drive!

Any advice?

Regards, Strathglass