Install Windows 7 from iso

Where/When does this error occur? Can you post a screen shot? Does your virtual machine hardware configuration include a CD/DVD device?
 
How did you get to the "Select the driver to be installed" window in the Windows 7 installer?

Are you not using the Parallels Desktop new virtual machine feature that automatically installs Windows 7 for you?

Parallels Desktop -> New... -> Choose an image file..., select the Windows 7 iso, Continue -> Express installation, enter Windows 7 product key, Continue -> Like a PC, Continue -> Customize settings before installation (if you want to set the virtual hard disk size, etc). Then start up the virtual machine.
 
I was trying to install the 64bit version on Parallels Desktop 5. I installed the 86x version with no problems. I guess version 5 doesn't support 64bit.
 
I had the same issue with an Win 7 ultimate .iso file downloaded from the Microsoft store. Loaded the image and then coming up with the message CD/DVD driver missing. It turned out that the downloaded .iso file was not the same size as the image file was supposed to be i.e. 2.2GB versus 2.5GB. I downloaded again and the installation went without problems. Check that the .iso image is the correct size as it maybe corrupt from an improper download.
 
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