Snow Leopard upgrade with Parallels 4 - different issue

After buying a new MacBook, I migrated my Leopard drive from my old Macbook Pro to OS 10.6.3 on the Macbook. I then installed Windows XP using Boot Camp. Launching Parallels Desktop seems to work fine, except I am prompted to install Parallels tools at the bottom of the Windows boot screen. That makes sense to me. Unfortunately, nothing happens when I choose that menu item. I tried reinstalling Parallels from the web site (latest version) but I'm getting the same issue. Very frustrating. Any ideas?