i installed a brand new windows xp home with service pack 2 i just purchased from office max for 209.00 on an intel based macbook with 1 gig ram, 2.0ghz core 2 duo chip.went like this:
spark up parallels go file-> new, the wizard starts, enter info, get to a screen that says configuration, and it is a menu screen, click on the word "configuration", right under the word "settings", then click on bootable and select the boot sequence: cdrom, harddisk,floppy, click OK, then the green arrow to start the install.
i ran into trouble when the install had 39 mins left to go, the installer hung when it was searching for a file it couldn't find, the cd had some very small physical indiscrepancies that could be seen if inspected in the light, and the machine couldn't read the whole disk, exchanged the cd at office max, the install then went smooth all the way through, and office 97 even works in parallels! amazing!