I keep getting a prompt that it needs to create a 1GB bootable disk. After I select that and where to put it (in the Parallels folder), it starts going then gives an error that it "Failed to create a bootable disk image file for this version of macOS." I can't figure out how to get around this or what the problem is.
I have seen this issue. This happened with me multiple times trying to get Yosemite to install in PD16. I went around and around with lots of combinations and eventually this is what worked. This could probably be optimized, though. 1. Downloaded Yosemite InstallMacOSX.dmg installer from the Apple Legacy OS page. 2. Created a MacOS VM using the recovery partition (for me it's Big Sur). 3. From within the Big Sur VM, I ran the InstallMacOSX.pkg, which created an "Install OS X Yosemite" app in the Applications folder. (I ran this in the VM because I didn't know what it would do and if it would mess-up my host machine) 4. Copied the Install OS X Yosemite app to the Host machine. 5. Now I created a new VM with GuestOS option and drag/dropped the Install OS X Yosemite.app to start the process. It did say it needed to create a bootable disk image and I gave it a name and location, and everything worked. 6. For some reason, I felt like I needed to keep the Configuration settings unlocked while creating the VM. Seems like a previous attempt it said something like it needed access to the host credentials??? I forget. This whole process seemed way more painful than it needed to be.
I successfully Followed Gadgetgrrrl's process above. I have Parallels Desktop Pro 17.1 - current at 7 Nov. 2021 I had created a High Sierra VM already, so used that to Create an "Install Mac OS X Lion.app" by running the InstallMacOSX.pkg package from the Installer application. Note this does not fail in a VM as it does when tried on the host machine (because the host is too new for the old OS). Then copy the .app file back to your host machine and follow the Parallels install process for a new VM using this file. - Step 4 above. The problem appears to be Parallels wants to use the install.app file, where older OS versions are contained in .dmg files. Fortunately High Sierra is available as a .app file from Apple. Say hello again to your favourite old 32 bit applications !
Where did yiou get the High Sierra link? I was only able to get the Sierra off the apple support pages. https://support.apple.com/en-us/HT211683
The Hi That page does show the High Sierra download link. It will download the install app, not an image. The install process is now easier with Parallels v17: select the High Sierra Install app when creating a new VM. Parallels will then ask you to create an image disk from the app. Just follow the instructions.
