Paralles won't recognize Windows Home edition disk

I am trying to install windows home edition - store bought - and when I get to the configuration window it won't recognize the disk. It asks me to install a disk with an acceptable version of windows. Anyone know a fix?

 

It is probably SP1. You need SP2.

 

Thanks - the box says it's Home edition versioin 2002 with SP2

 

You need SP2 for bootcamp, but not for Parallels. If you install an earlier version, of course, you should download the latest SP.