When I do an offsite backup of the Snapshots folder created on the Mac under the Parallels folder, is this sufficient for a backup to restore the virtual manager and its applications and data as of the date the snapshot was taken? If not, specifically what files do I need to backup?
No. You need to shut down your VM and Parallels, and use a Mac backup tool to back up the entire VM directory structure.
If you are contemplating installing new software or drivers in your VM then it is a great idea to make a snapshot of it first. If the new stuff breaks you can revert quickly to the previous snapshot. Snapshotting allows you to so some radical things to your VM and to quickly recover but what it is not is a backup or substitute for a backup. Snapshotting has interdependancies on the disk compressor tool and with secondary virtual hard drives you may have added. Snapshots can and have failed. If you do a complete shutdown of Parallels and backup the directory tree you will have a complete code set of your VM, including your existing snapshots, that you can recover from and that insurance is what backups are all about.
how to backup So, if I understand correctly, to backup my whole VM, I would stop the VM, quit the Parallels Desktop program, and, now back in Mac OS X, find the directory /Users/myusername/Documents/Parallels and tell (for example) DiskUtility or Toast to make a .dmg or .iso of the contents of that directory. Do I understand it? Then, after a massive failure of my Mac's HD, after I've reinstalled the Mac OS on the new HD, I would install Parallels Desktop from its disk, update the installation, then open the disk I made of the VM, and substitute its contents for the newly created contents of the /Users/myusername/Documents/Parallels directory, and voila, yes? This should perhaps be in the users manual (once my understanding of it is improved). Thanks.
This is correct. Parallels and all virtual machines live in OS X file space. That is where disaster recovery backups and restores should take place. Oddly enough you can make backups from within your virtual machines as well but without a viable virtual machine to restore to they have limited value for disaster recovery. It is a viable way to make backups of just your data from the virtual machine. For example if you have a couple hundred office documents, spread sheets, and presentations, you can back those up from within Windows either to a DVD/CD or to an archive folder in OS X. Multiple layers allow you to recover from a disaster such as an upgrade that destroys your VM and still have your data safe and conveniently available should you suffer from inadvertent deletion or corruption.