Yep, got the same error. Using Mac book with Leopard, was running ok on 3.0 version then foolishly decided to go for this disastrous 4.0 version. I was getting to the same screen that does not give any response just as you all described above. Then in desperation I just kept on clicking on start which restarts the upgrade image process and finally it came up with the "you need to manually continue the upgrade process," window ... had an "ok" button ... I clicked that and got to a dos like screen that says, "No boot device is available". Unbelievable ... just wasted my whole day with Parallels ... funny how your own $80 can get you into a real bind. Was working with 3.0 before getting a good ol' Parallels advert on 4.0 and all its new greatness ... fell for it they totally destroyed my working image ... bad part is I didn't even do the backup option ('too much faith in dear Parallels team') ... now I've tonnes of work on the image that I cannot even begin to recover ... Oh, and since i am in a bind at work to release my code which is stuck on the Visual Studio on the image ... now I have no option but to pay another $30 tomorrow to at least get the great opportunity to talk to a tech support guy at Parallels so at least I can see how I can try to recover just my data ... As for trusting my data again on those Parallels images ... well, that's another story for another day and another blog ... but for serious windows development work or serious business data or anything mission critical .. definitely don't follow my lead, let me be your example of what not to do ... I just think a general rule of the thumb for anyone in the business of critical OS related software is to be open with tech support through all channels at least 24/7 .. maybe its just me but OS is pretty critical software type business because it can really put some of us out of commission ... and to do it with 3 day type response times via email only or pay per chat says a lot about commitment to customers ...