Got mine to get past "Installing Devices..."
Had the same issue.
MacBook Core 2 Due, 2 GB RAM, Latest Parallels.
Seemed to "hang" at "Installing Devices..." and "33 Minutes left".
I stopped Parallels (Hit STOP button), ejected my XP Pro CD, restarted Parallels (Hit PLAY button), the Windows install started from where it left off, prompted me for the CD, I inserted it, and volia. It got past the "Installing Devices..." part.
As I write this, it's on the "Installing Start Menu items..." section, so, fingers crossed, it'll get thru the rest.