I should add that if you want to match the current resolution of your screen (ie for all those widescreen users) so that Parallels in Full screen mode has the same resolution...
1) goto system preferences
2) select Display and write down what resolution you are currently running under MacOSX.
3) Use MacOSX resolution size now under the Parallels VM Video Setting (VM Properites Page) ie instead of the 1024x768 resolution I sugested above.
If you are stuck in windowed mode and cannot see the WinXP Task Bar at the bottom as you have chnged your MacOS X resolution of added a Secondary monitor etc... right click on the WinXP desktop area and select 'Properties'. Now change your WinXP Display resolution (Windowed mode resolution) to something a bit smaller.
Now to sum up...
Setting up Video Resolutions under VM Properties you will set your Parallels Full Screen Mode resolution.
Changing the WinXP Desktop resolution only affects you Parallels Windowed Mode Resolution.
Last edited: Nov 29, 2006