I was getting similar results on my bootcamp partition, and during startup of Parallels the Mac side was essentially hung, with long delays booting Win XP SP2. Both Parallels and all Mac applications ran slowly as long as Parallels was active. That was with half of my 2GB of RAM assigned to Parallels, on a Core 1 Duo 2 GHz Macbook. After reading some threads from Linux users I reduced the memory allocation for Parallels to 512 MB, and that made a huge improvement in both Mac and Windows performance. Chances are that Parallels was taking too much virtual memory from MacOS, and ended up causing paging on the Mac side. Now my CPU use is about 15% of one CPU for an idle boot camp Windows partition, dropping to 7% if I pause the VM. That is similar to the CPU use from a typical Mac program that has windows open but is idle. Parallels often uses over 100% of one CPU when there is real work being done in Windows, but that's to be expected.