I have exactly the same problem: today, I tried to install Windows 7 (x64) from an original DVD, and had the same symptoms.
Here are some relevant lines of what appears in the VM window at first boot time:
Trying to boot from SATA drive 1... failed.
Trying to boot from SATA optical drive 2... SATA optical drive 2 failed.
[...]
No boot device is available, press Enter to continue.
Some time after, a sheet appears on the window, saying that it's impossible to connect to CD/DVD 1 (0801 etc. etc.).
The CD/DVD drive is on SATA 0:2 (and the HD of course on SATA 0:1).
Looks like some kind of bug in the latest Parallels Desktop 7 (7.0.15104.778994) version; BTW, I have just upgraded from OS X 10.7.4 to 10.8...
Is removing and reinstalling Parallels Desktop really necessary? Will this maybe be solved in the next version?
Last edited: Aug 10, 2012