I just installed Parallels 7 and installed Windows 7, and had no problem downloading all updates from Windows Update. After having some trouble with a program that would not work on that OS, I decided to delete the Win 7 VM and install Windows XP. The disk was SP2, so I proceeded to the Windows Update page and after watching the green bars move for a few moments, viewed it crash IE. I tried this a few times, then tried reinstalling Parallels Tools. Now it doesn't crash, but just gives an error. I have VMWare Fusion 3 with XP (fully updated) and opened that (on the same iMac, after closing down Parallels). Went to the Windows Update page and it worked perfectly. Is this an issue with the latest build of Parallels? I initially tried migrating the Fusion XP to Parallels, but kept getting an error (which, I believe, I saw somewhere is a known bug in the latest Parallels build). Any help is appreciated!