I have all my Parallels VMs on an external drive. What I did was move ~/Library/Parallels to the external drive. Works fine. Perhaps support for this could be a better within Parallels, but the amount of work I needed to do was minimal.
This also makes the VMs available to other users with the correct permissions.
As for network drives - if you can mount the drive in OS X you can store the VMs there. You can select where on the file system or external drive or network drive to open a VM from.
Actually mounting external drives from within the guest OS is not yet supported, but from your second post, it looks like you don't need to do that.
If you need extra HD space on your VM, you can add up to three new virtual drives and format them the same way you would do on a real machine running Windows or whatever OS you're using. You can store this virtual drive anywhere on your Mac or external drive or network drive and just point the VM configuration to that location. It will show up looking like an internal drive in Windows as probably drive E: etc, and in Linux as /dev/sdbX
Last edited: Oct 13, 2006