I've encountered the same problem for two operating systems: Ubuntu Server (64 bit) and Windows 7. (both 64 and 32 bit versions)
The operating systems cannot be installed (this is a bit of a problem with Windows 7 because neither version will install).
In all three cases, they say they are missing drivers for the CD/DVD drive (despite having successfully loaded themselves from said drive).
Anyone else having this issue? What is the solution? I'm assuming it's a fix for Parallels server--seems like the drive drivers are working fine at some level.