after update to 9308 (from 5.0.something prev), it trying Parallels Tools installation to fail on my VM(XP w SP3). when it starts the Parrallels Tools Install, installation seems to being done well in the beginning. but suddenly, windows makes come up another window "new hardware wizard" that says "new HW has been detected and installed: Parallels Video Adapter; click Finnish and close the wizard" as clicking Finish, wizard goes off. but then, eh, parallels tools shows "Rolling Back Action" and all the progressions are rewinded and at last it shows the alert "an error occurred while installing Parallels Tools. restart and try again" restarting and retrying, goes nothing well. thanks.
Could you please click menu of Parallels Desktop "Help" -> "Report a Problem" and send a problem report, then post here its ID?
I suggest you deinstall Parallels tools (in Windows), reboot, and - if Parallels doesn't install the tools by itself - select "install Parallels Tools" from the Parallels menu. Hopefully the tools update will now work. It does take a while.