Ever since I upgraded to Parallels 7, this has been nothing but trouble. First, using the original build of Parallels 7, my Windows 7 VM would freeze and became unusable and would lock up everything such that I had to throw out the VM and start all over again. Next came the latest build with its share of problems as well - the freezing problem got fixed but what did not get fixed from the earlier build is the bug that would not allow me to make a copy of the VM either on the HD itself or on any external HD. I have already switched back to Parallels 6 and will not install 7 until this stupid Error - 36 bug is fixed. Yup, the Permissions are in order and the HD has been checked with Disk Utility and it is fine and the laptop is a brand new unit and the OS X Lion is a brand-new installation. Hope someone has a suggestion. An acknowledgement from Parallels would help.