I'm using RC2 but this happened with RC1 also. Whenever I open a VM I suspended the Parallels Tools setup comes up asking me if I want to remove the tools. Does that happen to anyone else? Is it a bug?
Found a solution: Simply unmouont the CD Rom under the Device menu in the menubar. This happens if its connected to the parallels tools image.
Nice solution. I ended up sort of brute-forcing it in XP by removing the drive letter (D) that was assigned to the CD drive, using the Win XP Computer Managment app. Achieved the same end result I think. The simple right-click "Eject" command in Windows did nothing to get rid of the D: drive.
Don't try this at home Surprise surprise, removing the drive letter from the CD drive (see above) can have "unforeseen consequences." As in, "Gee, why aren't the Parallel Tools from my 3.0 upgrade installing properly?" Restored the letter (D), restarted the virtual machine, Tools installed themselves, all seems happy again.