I have exactly the same issue. Things that I've tried:
1, Changing to 1 processor
2, Removing the floppy disk
3, Reducing the memory to 1Gb
4, Booting into bootcamp and removing the parallels tools, then rebuilding the Parallels VM
None of these make any difference. I've also tried to open a support ticket, but as I got it as a free upgrade I don't have an order number so I can't get a support code.
I've searched all of the forum and whilst there are a number of people who obviously have the same problem, there are no working suggestions on how to fix this particular BSOD. The 'single processor' option does not work!
In the end, I've removed Parallels 5 and gone back to v4. Of course, I now need to re-license all of the software installed in the virtual machine.
Considering how difficult it was to get my 'free upgrade' (confirming eligibility given the mass of conflicting information on the website and with Parallels sales staff - took over a week) and then this problem, the whole upgrade has, so far been an utter waste of time.
So, to be clear about what I know of this problem:
It seems to only affect users that have a boot camp partition
It is limited to Windows XP guests
None of the existing published fixes for other BSOD error messages make any difference
Please can this be looked into as quickly as possible!
Thanks,
Ian