Not all video modes are supported, only 16 bit modes seem to work correctly.
Change video mode until next android boot:
1. In grub menu hit 'e' with boot option selected
2. In option edit menu hit 'e' on the line that starts with "kernel ..."
3. Append to that line option "vga=0xXXX", where XXX is one of VBE modes (putting invalid value that is more than 0x357 e.g. "vga=0xFFF" boot to pause and allows listing all availible VBE modes and selecting one interactively)
4. VM will boot with selected video mode.
Change video mode permanently:
- from host
1. Mount android VM virtual disk (located inside .pvm) with Parallels mounter.
2. Edit menu.lst file that is located at /Volumes/.PEVolumes/<VM name>/grub/menu.lst
3. Unmount virtual disk.
4. Changes will apply at next VM start.
- from inside VM
1. Boot to debug mode.
2. Execute commands
mkdir /boot
mount /dev/block/sda1 /boot
vi /boot/grub/menu.lst
3. This will open grub configuration file with vi editor
4. You can edit any of the options, appending vga=0xXXX to "kernel …" line or create new option with desired video mode.
5. Hit Ctrl-D two times after file modification to continue boot.
6. After next reboot VM will start with selected video mode.