I've installed, re-installed, and upgraded my Parallels Tools to no avail. I only get 800x600. When I drag to make it larger, it only scales the 800x600 view to a new size. It does not increase the resolution. I'm pretty sure the tools intend to increase the resolution via the frame buffer driver when the window is resized, but that's definitely not working for me in Ubuntu 14.04. Setting the resolution in the grub config is the only solution I could find that actually works.