I also noticed what seems to be a memory leak in Parallels v5, especially running x64 Windows RC. For other reasons I blew that one away and created a new VM w/ x32 Windows 7 RC. On my iMac 21" w/ 4 GB and everything else stock, I did NOT experience anymore of the eventual crawl. When I started experiencing the crawl w/ x64 Win7RC and Parallels v5, I did some experimenting as discussed above. After reboot, with no auto starts I would start only Parallels v5 w/ the x64 Win7RC. And yes, it would eventually start to crawl, if I stayed on that long. And I did find it strange that neither system monitor showed any unusual activity except for continual disk I/O, and this was with no apps running in Win7RC or the iMac. I once figured that indeed maybe one of the operating systems might be doing some background processing: indexing, auto compression, disk defrag, virus checking, ... so I just let things run overnight. 10 hours later the disk I/O activity was the same. It like the machine never goes idle, but Task Manager would show %85+ idle. I could not believe there would be a background process that would not finish whatever it was doing in 10 hrs. I suspected the VM because this had never happened before running the VM and has never happened when the VM is not running. Also it was the VM's disk activity light that was flashing. As others, I have perceived some sort of issue w/ Parallels v5 not seen in v4. I figure one of the updates will eventually fix it, maybe with a release note like "improved stability and performance".