Compressor - how to?

The menu item to run compressor in the action menu is always inactive for me. How does this work?

 

Everything you could ever possibly want to know about compressor can be found here:
http://forum.parallels.com/forum52.html

 

Well, I looked where suggested and still no answer to my question.

 

Are you running Windows in your VM? If so then click right on the Parallels tool icon on the task bar and select "About". The version should match your Parallels version. If it does not, or if it does not exist, you may have a Parallels tools problem. If it is the correct version see if you can launch it in the Tools menu.

 

You could also try running compacting from inside windows using parallels tools