Hi, I'd like to do the same thing - I installed the wrong (unsupported) version of vista, and need to uninstall it. I see no one has responded here - have you found the answer from a different source?
thanks!
jeanne
Just open (do not start) th VM you'd like to delete - click "File" - "Delete" and follow Wizard's instructions.
After that just create new Windows XP VM in Parallels.