harryc wrote: "Let me ask the question a different way. Is Parallels tools in 3094 designed to work with an XP bootcamp VM?"
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Certainly. I'm using it right now. Before you install Tools, make absolutely certain you have uninstalled Tools from BOTH native Bootcamp, as well as the VM. Some guys including myself have experienced loss of keyboard and mouse in native Bootcamp after installing Tools before removing it from native Bootcamp and the old VM. At this point there is no fix, so be prepared...
I highly recommend everybody download DriveImage XML (its free), make a backup of Bootcamp before changing anything to it using Parallels' betas. Also, make yourself a BartPE boot CD, and get the DriveImage plug-in for it so you can restore the Drive Image to the C: drive.