It Works! (surprise, relief, and angst) It works! I'm not really sure why, and I don't really know how, but ... it works. After days of long hours, nailbiting, and countless color wheel spins, I tried what John from Parallels suggested below and it works. It did not entirely do the things he listed during this process and I had to bump off a couple of walls. A few times it was dark in the room and some things went bump in the night. Nonetheless, after 4 days of installing, it works. I feel so relieved. Note that I followed the steps mentioned below. Step 1 was easy. Step 2 means (I think) to go to the top menu and tell it to "Devices - CD Rom - Connect Image" - at least that is what I did. From there, I put steps 3, 4 and 5 in place as noted. Step 6 went off and then Step 7 (MS KB arcticle) did not happen and it went completely into windows. This was scary because I had a new desktop, wrong background, and no shortcuts but when it finally came up I had my programs. Later I learned that what really happened was that it created a "Parallels Helper" user and booted into a fresh desktop. SCARY when I didn't know what it was doing. I kept checking my VM file to see if it was shrinking in size and it was not. From there I switched users to my user and everything was wonderful, except that it would not install the Parallel Tools. So, (1 hour later in the boot sequence) I returned to the instructions and did step 8. Rebooting the VM took about 2 hours to get it through all of the prompts and it was fussy about drivers and things. Some of which it never found. Once it made it to the desktop complete, I told it from the menu to install Parallels Tools, which it did (wow, it worked). It was still fussy about something and it was running very slow. I decided to shut the VM down, shut down my mac and reboot, which took another hour because it was running really slow looking for things or something. On reboot of the whole thing and into the VM I received the "Validate Windows" and "Register MS OFfice". Once that was complete everything is here, my data and programs are all where I left them and everything appears to be working. All total I think I spent 30-35 hours installing the update. But hey, I needed a couple of days off of work, especially really stressful ones where you think you lost a lot of things, might have to reinstall everything, and are constantly thinking about all the things you could be doing better with you computer other than just trying to get it to run. Nonetheless, the things I see now are cool and it seems to be much faster, especially when switching from Parallels to Mac applications which was often slow in 3. I run Parallels in a single window as I learned in earlier versions that Coherence made it drrrrraaaaaggg and when putting the VM into Pause and then the Mac to sleep, it occasionally had recovery issues on resume. So, I haven't tried the new Coherence, but everything else seems to be MUCH faster and it looks like there are some cool features. One last thing. TIME CAPSULE is now my daily friend. Get one, it saves a lot of nail biting when things like this happen. Here's the instructions from John at Parallels about the steps I mentioned above. Blessings to you.