Doesn't fix it really, helps.. but real issue seems to get worse if on an external monitor.. Parallels has dropped the ball horribly on this.Another work around for the window dragging lag, without replacing your mouse is:
Configure the VM
Hardware tab
Boot Order
Advanced Settings
Boot flags: devices.usb.mouse=0
That will get rid of the window dragging lag. It does nothing for the poor video rendering performance however.