I checked the settings on the 2G iMac. Parallels has 636 Main Memory, 16 Video Memory, and a virtual disk size of 8000MB. I haven't noticed a slowdown in the Mac with these settings.
But I'm concerned about the disk space and would like to adjust this. I've found the "recreate" option, but it appears to be destructive. Having paid for many upgrades of Partition Magic, I was hoping that there was a similar capability with Parallels.
If I want to have a smaller VM, do I have to lose all of my Windows data?
If so, I might wait until they perfect Boot Camp so that I can install Windows with my upgrade XP disk the way I did with Parallels - or maybe do this with an external disk. It's just too much work to lose everything from Windows.