Hard Disk 1 points to the Boot Camp partition. It actually points to the entire disk but only the Boot Camp partition is accessible and used. The other partitions are not accessible in Parallels so it won't get formatted by Windows even if you asked it to. If you look inside the .hdd, you'll see that it has it's own copy of your disk's MBR and GPT partition tables. All this means that it's possible to run multiple VM's that use different partitions on the same physical disk as long as each VM doesn't use a partition that is used by another VM that is running at the same time. If the hard disk contains multiple Windows partitions, then the Hard Disk options will allow you to select which partitions are accessible in Windows. It won't allow you to select Mac partitions. Do you get "Unable to access hard disk 1" error when you try to start up the virtual machine or while it is running? When you startup a virtual machine that uses a Boot Camp partition, Parallels Desktop will try to unmount the Windows partition from the Finder so it can be used by the virtual machine. A partition cannot be unmounted if it has files in use by another application. If you have multiple hard disks (your Macbook probably only has one hard disk), then it's possible that after you reboot your Mac, the Hard Disk 1 might be pointing to the wrong hard disk and you need to change it back to the correct hard disk. If you get the error message while you're logged into Windows (I don't see how that's possible), then you have a big problem and should use the "Report a problem" menu item as soon as you see the error message and while the error message is displayed.