I recently downloaded ClamXav for Mac OS X (10.4.9, Intel). When I did a scan it found the virus DOS.Dotdot-Exe-Gen-4 in the Parallels .hdd file. However, if I try to quarantine it, it just moves the whole .hdd file. The virus doesn't show up with AVG scanning or my 1-month trial version of Kaspersky IS (which I had to download from Kaspersky because the version included with Parallels doesn't install (see http://forum.parallels.com/showthread.php?t=9628&highlight=kaspersky)). Does anyone know how I can remove the virus?
You cannot use OS X tools to virus scan the .hdd files. False positives cannot be avoided, and as you observer, there's nothing you can do about it even if it is not a false positive. Use WinClam or Kaspersky in Windows to test the Windows filespace. If you have a virus then the smart thing to do is to delete the .hdd file entirely and use a copy of a recent .hdd file backup. You do back them up, right?
Keep in mind, that with disabled sharing windows viruses can't damage your Mac files. So you can turn it off, install anti-virus software, kill all evil and then use VM as usual