It's working for me, but it took some work. I had the cable modem plugged directly into my iMac and I couldn't get the guest WinXP to pick up an IP address. It only worked after I reset the cable modem thus forcing the DHCP server to reissue a new IP (I'm assuming). In my experience with standalone WinXP boxes, I've often had a time getting them to pick up an IP unless I manually reset the DHCP server. In this regards (as in many others) it doesn't "Just Work" but if you fight with it for a bit you can get it going.
Keep in mind, what it says on the Parallel's FAQ
Each Parallels virtual machine operates exactly like a stand-alone computer. This means that your virtual machine will obtain the IP address directly from the DHCP server, or you can manually configure it in the same way you have configured your primary OS in order to establish Internet connectivity.
