CAN'T START PARALLELS DESKTOP !?!?

I'm getting this message every time I try to start Parallels:

To start ''Windows XP'' please restart your Mac first. It has not been restarted after the Parallels Hyperviser System Extension was allowed.

And therefore it doesn't load. It's driving me crazy!

 

I changed the Hypervisor option from Parallels to Apple and it now works! However, when starting the PVM my captured Win XP PC is not wanting to boot up -- I get the blue screen of death! It never rains but it pours.

I get the front end Windows XP logo and the 'STARTING' bar for a few seconds, then it quits to the blue screen. (It never used to when I ran the PVM on a slightly older iMac?!?!?)