Hi MacP1,
Before you try the below steps, please take a Snapshot of Windows Virtual Machine as suggested at http://kb.parallels.com/5691
To resolve the internal error Failed to expand shell folder constant UserAppData :
Open Registry Editor in elevated mode after starting the Virtual Machine.
Navigate to registry path, HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\User Shell Folders
Select the AppData (on right side pane) and verify that value is %USERPROFILE%\AppData\Roaming
Incorrect value of AppData is set as %APPDATA%
Change the value to %USERPROFILE%\AppData\Roaming and click Ok.
Now check the issue resolve.
If still internal error occur means, navigate toHKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\User Shell Folders
Delete the Recent key (on right side pane).
Please let us know, if you have any additional questions. We're always here to help you.