Trying to Install XP SP1 on Parallels 5.0 (Snow Leopard)

I've seen this topic a few times and their apparent resolutions on this forum, but nothing has worked.

Installing from a disk results in hanging up on "Installing Devices."

Changed the CPU to 2 ... same result.

Creating ISO from install disk ... VM is not reading it apparently because it will not boot.

Also, tried Parallels image tool ... the instruction I found on this does not match the actual software capabilities in the version I'm running.

Help is appreciated.