I also had this issue. It seems as though certain 'operations' will set the boot-args back to the default. After the machine hung, I simply went back to terminal and reset the boot-args back to "-legacy". Parallels is now running smoothly, though I cannot get the network adapter to work at all.
I've also had some problems when automatically starting the VM. It seems to work best when manually selecting your VM, then manually starting (booting). Setting Parallels to "Load recently used VM at startup" would sometimes result in an "Untitled VM" being loaded which would cause an error when booting.
Windows XP Pro boots in 14 seconds, much faster than I've ever seen before (I've used Windows machines for the past 16 years). and three times quicker than on my MacBook Pro.
Last edited: Aug 18, 2006