Target directory </Users/***> cannot be created

Upgraded to Leopard.

Did not uninstall Parallels first as I now see is recommended but I have since.
I fire up Parallels 3, hit the green triangle and get this message:

"Target directory <directory it's creating here> cannot be created! Please check if there is enough free disk space available on destination and you have proper access permissions."

I am Admin and have more than 100Gb free space.

I have searched and only one guy had the same problem and got no replies to his post. the uninstall/repair permissions/reinstall has had no effect. Still the same issue. An email request for support has gone un-replied to.

Any pointers would be very much appreciated.
TIA

Gavin