4GB ram VM unusable in Lion

I have a late 2010 MBP with 8gb of RAM. I don't know if Apple or Parallels is to blame but I am unable to use 4GB of ram with my VMs in Parallels since I've upgraded. I can boot them up but once I start running apps on the VM and using it exactly how I used it under Snow Leopard the memory pegs out on my machine and it thrashes heavily. This is even when all I am running is Parallels and nothing else. I've resorted to a 2GB VM for now and I may have to downgrade back to Snow Leopard.