Problem converting bootcamp base XP VM

I know if it isn't broken, I shouldn't fix it. That is why I have been using Parallels 3 for a couple of years and it has been working very well. But I just upgraded to Snow Leopard and realized that Parallels 3 no longer work. So I upgrade it to Parallels 4 and now all hells break lose.

My immediate problem is that I am in the middle of converting a bootcamp based XP VM and it is showing a window with the message "Please wait while the virtual machine is being upgraded...". Below that there is a note "This operation may take some time to complete. During this time, do not switch off or restart your Mac."

Ok, so it will take some time. But it has been stuck in "Searching for new devices (Step 2 of 4)" for over two hours already. How much longer do I have to wait? This isn't normal, is it? What can I do at this point? Any suggestion will be much appreciated.