I updated to 10.1 yesterday on my late 2013 iMac, 3.2 GHz. Every time I plug in a USB device, the system either causes a log out and even worse, causes a kernel panic. When trying to restart PD10.1, it will sit in restore mode forever unless I quit PD10.1 and reboot. The last time it happened, it even thoroughly corrupted my Win8.1 VM to unusable. Fortunately, I had a PD10.0 backup of this VM and reverted my system back to 10.0. It is appearing more and more that with every update "fix", more and more is getting broken, and not just minor annoyances ether.
Hi EllwoodN, Please uninstall Parallels Desktop 10 for Mac : http://kb.parallels.com/122653 Download Parallels Desktop 10 for Mac latest build from : www.parallels.com/directdownload/pd10 And install it. Start Virtual Machine and (re)install Parallels Tools as suggested at http://kb.parallels.com/4841 (Please make sure that you have disabled Windows firewall and Antivirus application while installing Parallels Tools)