Based on the lack of comment I suspect my description of VMs going "poof" is, perhaps, not being believed... so I am pleased to present Poof! The Movie Made using Parallels build 1922 with a VM built using 1920. Capture by SnapzPro. Other details available on request...
it looks like it trying to switch to a video size that it cant handle check that you have you guest video size and xp video sizes in sync.
You missed some of my previous posts in which I described how this VM installed XP fully, did software downloads, reset the monitor size, etc., all wonderful on its first day of operation. It is on the second day that XP starts "poofing" and the timing of the "poof" varies -- sometimes it doesn't get as far as resizing the monitor. ...and in any case, why is there no error message or diagnostic of any kind whatsoever from windows or from parallels??? The only explanation of "poof" behavior is that somehow, Parallels thinks the VM has shut down. This points to a bug in Parallels, probably in the emulated BIOS code.