Memory/Slowdown with Parallels 5

I just got Parallels 5 and installed Windows 7 Professional.

I have the max memory for both the VM and Parallels set to 2GB w/4GB of ram in my MacBook Pro. I have more than enough free memory when I first launch Parallels but the moment I boot in all of my free memory becomes 'wired' memory and all of sudden it seems like all my laptop is doing is using swap.

This laptop is basically brand new (Snow Leopard) and running Parallels 5 makes it completely unusable.

What do I do?

Some Stats:
OS: OS X Snow Leopard 10.6.2
Build: Parallels Build # 9220
Model: MacBook Pro 15" 2.66Ghz Mid-2009
Memory: 4GB of Ram
Hard Drive: 500GB 7200RPM 2.5" Drive
Bootcamp: No Bootcamp
Build this started with: Only Installed Build 9220
Parallels Tools: Parallels Tools are installed
What have I tried: I have tried changing the max memory available in both the VM settings and the Parallels settings

 

I've got the same issue with a brand new 27" iMac with i7 processor and 4GB RAM. Any suggestions (other than buying more RAM)?

 

Same here on a MacBook Air (which only has 2 Gig to begin with). I think this is because Parallels 5 disregards the "optimise for Mac OS X applications" settings (which used to work fine in Parallels 4). The tons of wired memory that Parallels 5 requests are for pre-caching the hard drive as far as I know. However, this causes the Mac to start swapping to Virtual Memory really early, and that again causes very slow Virtual Machines. Not good.

 

Sent in a ticket. Will post here if they say anything.