Hi all, I had some trouble until I managed to coerce Parallels into installing Snow Leopard Server. The reason I am doing this is because the Lion Server is under severe teething pains. It is not stable at all, acting up on services after reboot. It may work for you if you only have modest needs, such as a file server; but if you need the full monty, you will be in trouble. As far as I know, the Snow Leopard Server is rock solid, so I am giving it a shot, until Lion Server matures enough to be useable. Here' s how I managed to do it: Get your official SL server installation media. I have done it with the .dmg downloaded from Apple Developer Connection. The physical media should work as well. 1) Begin installation of a 'Windows' machine. Don't worry, it will detect the correct OS subsequently. 2) Select the installation media as your installer disc (duh). 3) Once you arrive at the end of the wizard, DON'T BOOT JUST YET. It won' t work. Customize your VM first. 4) Set the amount of RAM you want. Don' t bother with hard disc 1, it is crooked. I never managed to install in it. You have to create a SECOND hard disc. Give it the file size you want. DON' T remove hard disc 1 yet. 5) Still on the VM configuration, set the DVD as the primary boot device, AND check the ' select boot device on startup'. 6) Close the VM configuration and boot the VM. Click on the boot screen to give keyboard focus to the VM asap. 7) PAY ATTENTION to the BIOS POST-like screen. It will tell you to press ESC to select boot options. Press ESC. 8) It will display 3 boot options. The DVD option won' t work (go figure). Try the second HDD first. If it does' t work, try the primary HDD. 9) You will see a dark screen, blueish-purple, with an Apple logo, a progress bar depleting, indication the timeout until boot, and a message indication to ' press any key for boot options' . Click on the left arrow. You will see the configured boot discs and the DVD install media. Select the installer and press enter. 10)Proceed with the installation on the second hard disk. 11) Once installation is finished, you can turn off the machine, go to the config again, and remove the primary disc, leaving only the installed one. You can also move the hard disk to the first boot device and optionally uncheck the ' select boot device' option. 12) Install Parallels Tools and have fun. Now, this is only my personal experience. If you try it and does not work, or if you find some step is unnecessary, please comment.