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Tim, your suggestion of "Optimize modifier keys for games" worked for me an my RDP into a WXP environment. Thanks for the hint. Looking forward...
I have a similar problem, in my case with a USB 1.1 device, the Fisher-Price FP3 player. I have tried multiple options including all 3 settings...
Vista running...or should I say jogging I'm up and running with the 1896.2 release and Vista RC1. Works pretty well - just minor challenges such...
Configure Parallels VM to have it a user preference. I like the idea of hiding it totally, especially if you could get a 1440x900 resolution....