Same problem here I have a Macbook Pro (last generation) with 4gigs of RAM and 200gigs hard disk. I recently upgraded to Leopard and Parallels was working PERFECT, until today, were I got the alread known error message - after been using it with Leopard for about 2 weeks. I have disabled Spaces and since then Parallels is in an infinite loop trying to launch itself every time I try to run it. I'm running Parallels 5160 on Leopard (10.5.1) and Windows Vista Ultimate. I think that we must wait until an update is realeased.