prl_client_app at 100% Cannot start Parallels 4.0

Hi, I just installed PD4, build 3540. I upgraded from PD3 but did this as a clean install with no VMs. After installation, I see a process called prl_client_app (identified as Parallels Starter by Activity Monitor) that consumes 100% CPU. This is before even attempting to start Parallels. When I do attempt to start, it jumps to two of the same processes and consumes all cycles. Looking at Activity Monitor, both processes are Not Responding.
Figuring this might be a Permissions issue, I went ahead and repaired permissions... No luck. I tried to run Parallels and the process hung again. Any ideas as to where to look?
I have uninstalled and reinstalled 3 times already. Upon reboot, I have to go in and kill the Parallels Starter before doing anything else.
Computer type is MacBook Pro, 2.4GHz processor. OSX 10.5.6 with 4GB RAM.

 

As an update.... I have installed this on another account on the same computer. It does work. But switching to my main account produces the prl_client_app hang.

 

And here's the log file...

I am posting the log file, as well.

 

Steps:
1. Open Terminal from /Applications/Utilities
2. type commands
cd Documents
rm -rf .parallels-vm-directory
3. Start Parallels

 

Now it starts! Many thanks!