Tried the above MS KB but did not work for me.
What did work was:
1) Start Windows 7.
2) Type regedit in the RUN or Start Menu search box and press Enter to open the Windows Registry Editor.
3) Change HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\services\msahci\Start to Zero.
4) Change HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\services\pciide\Start to Zero.
5) Shutdown Windows 7.
6) Change Parallels Hard Disk > Advanced Settings > Location from IDE 0.0 to SATA 0:1
7) Start Windows 7
The SATA driver will be installed and you will be asked to Restart. Restart and done