I've been experiencing extremely slow performance with Parallels in the past month or two (as in, it takes up to six minutes to launch a virtual machine), as well as lots of other oddities. For example, if Parallels is running (even if no virtual machine is running), Safari would refuse to create a new window. After a few weeks of puzzlement, I finally found out why.
Here is a link to a screenshot of Activity Monitor running when Parallels is not running. (It's too big to attach here, sorry.) The thing to note is that WindowServer is using around 57MB of memory.
Here's a screenshot of Activity Monitor when Parallels is running with no virtual machine active: WindowServer memory usage increases by over 300MB to 376MB.
Then, I launched Quartz Debug and checked out the invaluable Window List feature. I was a little surprised as to how many windows Parallels was allocating: there were around 50 windows of size 1279x639. With double buffering and 32bpp, Parallels is bringing the Mac OS X WindowServer process to its absolute knees, and was paging out to well over 1GB of disk space running a 320MB Windows XP VM, even though I have 2GB of main system RAM.
I'm guessing this is because of (1) having a 30" LCD monitor as my primary display, and (2) something to do with coherence support in Parallels. I think this explains a lot of the coherence bugs, dual-display bugs, and general instability and slowness that a lot of people are seeing with Parallels. What on Earth is it doing allocating nearly 50 windows?
If other people want to see whether Parallels is being equally silly on their system:
1. install the Xcode Developer Tools,
2. run the Quartz Debug utility in /Developer/Applications/Performance Tools/, and
3. go to the Tools menu -> Show Window List.
People with large resolutions (24" or 30" monitors) will probably suffer from this the most. I'll do a bit more investigating and report back if I find anything, but I haven't seen anything of this nature reported on the forums yet, so I thought I'd post something now. It makes Parallels pretty much unusable for me.