Here are my recommendations for how to configure your Windows for maximum protection against problems with Parallels, now and in the future: * Purchase Acronis True Image and Disk Director or equivalent products. * Create a second partition that has enough room to store a True Image backup file * Put all your Windows documents in the OS X file system * Configure all of your Windows programs to default to an OS X file location for saving/retrieving documents * Create an Acronis True Image bootable recovery CD * Set the boot order in Parallels so that the DVD drive is at the top of the list * Back up Windows and store the file in OS X, then copy that file to your second partition in Windows. * Create a Parallels snapshot of a working configuration. * Configure Parallels NOT to backup the virtual machine with Time Machine I haven't listed all the tools and utilities it takes to do this. If people are interested I'll put that together. Here's a narrative explanation of my advice. If you store your Windows documents in Windows, then you are always at risk of losing them if something goes wrong with your virtual machine. If you store your documents religiously in OS X, then you can use a backup strategy that protects all of your valuable files. I use Time Machine because it is drop-dead simple. If you ever need to restore Windows using True Image (or equivalent â€” but remember, you need to create a disk image backup), then you'll need to have the backup file available to Windows. If the backup is in OS X only, Windows can't see it when you are restoring a disk image. That's why it needs to be on a separate partition (I call mine the D: drive). Note, however, that if your virtual machine is ever totally hosed, you don't want your backup file to only be on the D: drive or you won't be able to use it if you rebuild your virtual machine (or perhaps rebuild it in Fusion when you get sick of Parallels). A snapshot is the easiest way to restore a virtual machine if you screw something up, get a terrible virus, etc. But remember, if you have any valuable documents in your current VM, they will get wiped out when you revert to a snapshot. This is another reason to keep documents in OS X. A snapshot, however, is vulnerable to any significant issues with Parallels, so that's why I recommend "wearing a belt and suspenders", i.e., having a snapshot and a disk image backup. My recommendation about not letting Time Machine back up the VM is based on this logic (which might be wrong): Time Machine backs up files that have changed since the last backup. I assume that the VM will always be changing. Because it is such a big file, that means you'll eat up your backup drive with new versions of the VM file. If Parallels is stable and everything is working well, then I think its better to have a snap shot and image file as I've described and use either one if something goes wrong than to have the absolute latest backup in Time Machine. BTW, I found that restoring an image of your C: disk using Acronis from within Windows is problematic within a virtual machine. It works much better to use a bootable recovery CD. True Home has a utility that creates this. However it is useless to have a bootable CD unless you've configured Parallels' boot order to have the DVD drive ahead of the hard drive. I also found that you may have to include the following parameter when you create the recovery disk: "acpi=off noapic". Last thought: before creating an image backup and snapshot, make sure that you have updated all of your applications to the latest release and have all of your Windows updates applied. If a lot of time passes between the snapshot/backup and the time you restore, you'll still have to update a lot of things, but I think it makes sense for your last snapshot/backup to be as up-to-date as possible. I haven't gone into details about the tools and utilities required to do all of the above. If you have a decent amount of Windows and Mac experience, you'll either know which tools to use or you can figure it out. Unfortunately if you don't have a lot of experience, it would take a very detailed step-by-step set of instructions which I don't have the time to create. I'm happy to answer specific questions if this little essay is of interest to anyone. Last, last thought: If you don't do anything else based on my list, do this: store all your Windows documents in OS X and let Time Machine back them up. That way if your VM gets hosed, you haven't lost all of your work.