When I attempt to open my virtual disk (winxp.hdd) using Parallels Explorer, I get a spinning beach ball forever, until I open Activity Monitor and kill Parallels Explorer. The Windows XP VM works fine, and I've run chkdsk inside Windows as well as OS X Disk Utility to fix and repair permissions. I've run a Compact Disk operation within the VM successfully. I created a new Windows VM and installed a fresh copy of Windows XP, thinking that my installation was somehow corrupted, to no avail. I've uninstalled and reinstalled Windows XP (twice) with no effect. Any ideas?
What build of Parallels do you have? You can check it in Parallels desktop menu (on top of the screen) - About Parallels desktop