Ok so I am going to use paralells instead of bootcamp only because I dont want to restart my mb every time I want to switch os's. NOW. What XP instalation disc do I need to use with paralells? Does it have to be a single disc non upgrade version thing or can it be the cheaper upgrade edition? ex: this Non upgrade edition (expensieve one) Or can it be this one? upgrade edition (better price)
I haven't tried this, but you should be able to install the upgrade version if you have a qualifying prior version to upgrade from. The XP install will ask for the disk for the qualifying version, and you will have to provide it in one of several ways (use a second physical CD ROM, use an ISO image connected to another virtual CD ROM, disconnect the CD, eject it, reconnect it, insert the qualifying disk, then switch back, or if all else fails, install the qualifying version first). If your time is worth much, get the full version. Note that if you want to install it in both Parallels and boot camp, you will have to "activate" twice which may require a phone call to Microsoft's "I'm a criminal until I prove otherwise" department. Tell them that the secind install is on the same machine and they'll give you a code (according to reports here).
Just to add some clarification, whatever you use has to have SP2 included. If you have an older XP CD (original or SP1), you can create a "slipstream" CD. There's a good set of instructions for doing so on Paul Thurrott's site: http://www.winsupersite.com/showcase/windowsxp_sp2_slipstream.asp Hopefully that'll help some folks out.
This is true for bootcamp, but not for Parallels. You can create an SP1 VM and update it via Windowsupdate.