I just upgraded to the newest beta and I am haveing a problem. When I loaded the newest version and started up windows, I got a message saying my parallels tools is out of date. It said if I click ok it will update them. I did that and then went through the process of updating parallels tools. In the middle of the process got the blue screen of death and then windows re-starts and I got the same thing again. I tried to go into add remove programs and remove parallels tools and still I had the same issue- When I removed it my machine crashed. Any ideas.
Ah hah! I finally figured out a way to do this. In MacOS, mount the Parallels Tools ISO that's in /Library/Parallels/Tools of your MacOS hard drive. Copy those files to a new folder on your mac. Copy that new folder to the Windows XP virtual machine. To do this step, I had to setup Windows sharing in my MacOS sharing preference pane. I then connected to the Windows shared folder from my WinXP virtual machine. Run the installer file PrlTools.exe in that directory from inside your WinXP virtual machine. Voila! Finally I have Parallels Tools, and everything appears to work fine!
