I just ran through an install of ubuntu-11.10-server-amd64.iso using Parallels 7.0.14924 on my Early 2011 MacBook Pro. Everything went well during the install.
Before installing Parallels Tools you might want to create a symbolic link for /usr/lib64. If you are going to stay command line, I don't think this will matter. The Parallels Tools installer looks for Xorg config under /usr/lib64 on a 64-bit distro, so if you later install Xorg then re-install Parallels Tools so that it can properly configure it.
sudo ln -s /usr/lib /usr/lib64
I also had to mount the cdrom device manually (with the exec option) to be able to install Parallels Tools.
sudo mount -t iso9660 -o exec /dev/cdrw /media/cdrom
Last edited: Oct 27, 2011