Yes, there is a bug in the Configuration window in Parallels Desktop 4.0 for the Mac. I haven't seen it written up officially, but I've encountered it several times myself. You can open the Configuration window and do nothing and still create the bug. (if you click "Ok")
What happens is this: the path to the drive in the config.pvs file gets corrupted, overwritten with a different path. Then your virtual machine won't be able to find "Hard Drive 1".
Fixing that problem is pretty simple, for a nerd: Open /Users/<username>/Documents/Parallels/<machinename>.pvm/config.pvs with TextEdit and replace the value of the <SystemName> attribute of the <Hdd> element to the full path to your virtual drive (mine is /Users/douglas/Documents/Parallels/BootcampXP.pvm/Hitachi Blah Blah.hdd)). The correct path points to the .hdd file inside your .pvm file.
If you get hit by the bug, making that change may be intimidating. But if you make a safe copy of your config.pvs file, you should be okay. I would like it if someone on the Parallels team would write up a detailed guide to doing that, with screenshots. I don't have time right now. (Frankly, I'd rather they just fixed the bug and announced an update.)
SUMMARY: if you are concerned, and everything is working smoothly for you, you may be smart to wait for the next Parallels software update before fiddling with your Configuration settings.
Last edited: Nov 18, 2008