My Host is 10.5.1. My Guest is Windows XP Pro. Any time I click a web-link on my Guest OS, Parallels will launch Safari on the Host with the link. I cannot find anyway to prevent this behavior. I do not want the Host OS to be set as the default browser. I want the web browser in the Guest OS to be set as default. Each time Firefox is launched in the Guest OS, it asks if I would like it to be the default browser. Agreeing to this request has no action. The Host OS still asks as the default browser.
Go to Parallel Preferences and under the General Tab, in the Shared Applications section, select Windows to open Web Applications. After doing so, the next time you open your VM and Windows, when you click on a link, Windows will use its default browser, in your case Firefox. I have additional information and helps on using Parallels on my blog at http://johnkendrick.wordpress.com, that you might find useful. Good luck, John
Inaccurate Guidance for Parallels 7 This guidance is completely inaccurate for Parallels 7. There is no "Shared Applications" section. Please clarify which version you are providing support for.