I upgraded to Windows 8.1 and I decided that I needed to make a recovery USB thumb drive. So I followed these instructions: http://windows.microsoft.com/en-US/windows-8/create-usb-recovery-drive First, I verified that I didn't have a recovery partition in my Parallels VM. Second, I created one. Third, i verified that it was there. Fourth, I tried to create the USB recovery thumb drive. The problem is that although it is there and registered with Windows OS the tool that would use it to create the thumb drive - doesn't see it. Any ideas?
Try to connect this USB device directly to the VM: click Devices > External Devices and check your thumb drive and try again.