Same thing...
20" IMac (late 2006) 2 GB, WinXP, SP2
I've sent this to
beta@parallels.com, but am bring it up here in the event that someone else may be having the same problems.
I installed 3170, and Windows started apparently normally. I did not see a message telling me to update Tools, though, which I thought was strange.
Remembering my experience with v. 3150 and previous, I went to install Tools with Windows in Safe mode after having gone through removing the previous Tools install with Control panel. Restarted Parallels as instructed. Windows XP started, progressed to the point where the black screen normally shows up momentarily, but instead of the black screen, I got the BSOD saying that Windows XP experienced a problem, which stayed about 1 second and then Windows automatically restarted again, unsuccessfully.
I then started Windows in Safe mode successfully. Thinking that it was the Tools install causing the problem, I tried to remove Tools using the Control panel. The uninstall started, but the a dialog informed me that I must complete the previous install by restarting the VM. I did so, and restarted in safe mode and tried to finish the operation with the same result. I looked at the Windows Parallels folder and the files were still there and were apparently the new Tools, with files dated 02-15-2007.
I Deleted the 3170 files and re-installed the 3150 version. I went to remove the Tools with XP in Safe mode and got the same results as above. I can still start successfully in Safe mode with or without network option, but still with the safe mode cripple.
I had installed the Bootcamp drivers in version 3150 to get the ISight functionality; could this have anything to do with the problem?
Where do I go from here?
By the way, friends, if you included your configuration (Mac model, Processor, memory, BootCamp or Not-BootCamp, Mac OS, and Windows OS) with your trouble report, it would help the folks at Parallels duplicate and resolve the issue more easily. I've noticed several varieties of Mac machines mentioned; each may have it's own unique behavior with Parallels due to the differences in configuration.