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As I mentioned above, downloading and installing the latest build solves the problem. I have been using Parallels in coherence since then without issue. I'm very very happy to be back off of Citrix. I had no idea how dependent I was on Parallels in my daily routines.
Andrew,
The issue appears on both Parallels 7 and Parallels 8 for anyone using Mountain Lion. You might as well just disable Coherence for ML users, it's completely unusable with both versions in ML.