Maybe this is old hat to most of you, but I'm posting this how-to for those who may be having difficulty getting their virtual machine network configurations set. I was attempting to set up Windows 98 on a LAN with a static IP. Here what worked for me: Parallels network setup for Windows 98 Basic issue is that the virtual computer and host computer cannot use the same static ip address. If you were hooked up to a router you could possibly request a 2nd address from the network administrator, but here is a cleaner solution. Outline: Use regular static ip for the host, enable sharing, and have the virtual computer use DCHP-type settings: Steps: 1) In OS X System Preferences, create a new location (e.g., work_w_Win98) Select Show: Built-in Ethernet, select Configure IPv4: Manually, and duplicate your standard IP settings. Then select Show: "Ethernet Adaptor (en2)" and select Configure IPv4: Using DHCP. Click "Apply Now" 2) Still in System Preferences, select to Internet & Networking > Sharing icon. Select "Built-in Ethernet" from the "Share your connect from:" drop-down menu. Then select "Ethernet Adaptor (en2)" in the "To computers using:" list. Click "Start" button to begin sharing. 3) In Parallels Network Adapter preferences, select Host-only Networking option. 4) After booting up Windows, Go to Start > Control Panels > Network (in Windows 98). From the Configuration tab, select your ethernet adaptor and select "Properites." On IP Address tab, select "Obtain an IP address automatically." On DNS Configuration tab select Disable DNS, and ditto to WINS Configuration tab. Click through the okays, restart, and you should be good to go.