Running Ubuntu 11.10 in the latest Parallels 7 with OS X 10.7.2 as a host, I find the login screen is distorted when I start Parallels up in full screen mode. Additionally, when the VM starts, the screen is distorted: the desktop background is tiled across the screen four times, instead of being drawn fullscreen, and the menu bar is only drawn part way across the screen. Taking the window out of fullscreen mode, and then putting it back into fullscreen mode, fixes this, although I usually have to relaunch Gnome 3 to clear up distortion.