!!FIXED!!
OK I spent some time researching this issue, and figured it out for myself. The Parallels Tools installer can be accessed from the command line; running it from the browser doesn't work because root permissions are necessary to run it. Also, it can only be accessed from the /media/Parallels Tools directory; copying the files to another directory will cause a "install: missing file operand" error.
First, open your Ubuntu 10.10 virtual machine, and select
"Virtual Machine>Reinstall Parallels Tools"
This will mount a virtual CD-ROM in your /media/ folder, and it will also show up on your desktop. From the Ubuntu Applications menu, open
Accessories>Terminal
Enter the following code, pressing enter after each line:
Code:
cd /media/"Parallels Tools"/
sudo ./install
The quotes around "Parallels Tools" are necessary because the path contains a space.
That will open the parallels tools window. Follow the instructions, and then just wait for a while when it politely asks you to wait during installation (it will look frozen for a while, just wait it out). Reboot your VM and you should be set!