Parallels 6 Update Messed Up VM

I recently did a clean install on my Mac Pro (2008) and decided to buy Parallels 6.0 upgrade. I installed Parallels, used my Windows XP disc and all was fine. I had been running it for weeks until I was alerted that there was an update (Dec. 17th) that was highly recommended. I downloaded it, installed and immediately the VM wouldn't work right. The resolution is incredibly small and I get Windows pop-ups saying it found all this new hardware (Video Controller, PCI Device). I also get a warning in the bottom of the Parallels window saying "Parallels Tools are not installed. From the VM menu, choose install Parallels Tools". I've gone through the Install Wizard several times and every time it tells me "Cannot Install this Hardware - Parallels Audio Controller (x32)", it rolls back the action and then a pop-up says "An error occurred while installing Parallels Tools. Click OK to restart your V<, and then try to install Parallels Tools again."

I'm stuck. I've searched for the solution and have found nothing. I'm in the middle of a 3D project using 3ds max and can't start it since whatever was in this update wrecked my VM. Any help would be greatly appreciated.