Having the same issue I've just fired up Parallels 3.0 (Build 5636) for the first time in a couple of months and found the same issue. I cannot find any way to get the network to work from within Parallels. I have recently upgraded to Mac OSX 10.5.8 - has been working fine for a year or two before this.
Please click Start->Run and execute cmd.exe type in it "ipconfig /all" (without quotes) and post here the screenshot with output
Ipconfig results Here's the ipconfig results with Shared networking enabled: Microsoft Windows XP [Version 5.1.2600] (C) Copyright 1985-2001 Microsoft Corp. C:\Documents and Settings\mac>ipconfig /all Windows IP Configuration Host Name . . . . . . . . . . . . : macxp Primary Dns Suffix . . . . . . . : Node Type . . . . . . . . . . . . : Unknown IP Routing Enabled. . . . . . . . : No WINS Proxy Enabled. . . . . . . . : No Ethernet adapter Local Area Connection: Connection-specific DNS Suffix . : Description . . . . . . . . . . . : Parallels Network Adapter Physical Address. . . . . . . . . : 00-1C-42-EC-19-55 Dhcp Enabled. . . . . . . . . . . : Yes Autoconfiguration Enabled . . . . : Yes Autoconfiguration IP Address. . . : 169.254.71.79 Subnet Mask . . . . . . . . . . . : 255.255.0.0 Default Gateway . . . . . . . . . : C:\Documents and Settings\mac>
I'm unsure on what is really going in Parallels 3.0 (know little).. May be repair of permissions will help... but as a quick try I can suggest Please start /Applications/Utilities/Terminal and execute the following commands (without quotes): 1) "ps aux | grep pvsnatd", post here an output 2) "ifconfig -al" (post here the output) 3) "ls /Library/Logs/CrashReporter/pvsnat*" (output) and as a main thing that should help 4) "sudo /Library/StartupItems/Parallels/pvsnatd" and restart the VM
I seem to have resolved it I ran the requested commands and started pasting all the outputs here but then seem to have resolved the problem as follows: Firstly /Library/StartupItems/Parallels/pvsnatd was already running and there were no crash outputs. So I shutdown XP and quit Parallels, killed pvsnatd and restarted it with sudo /Library/StartupItems/Parallels/pvsnatd I then restarted Parallels and checked the network configuration from the initial window. For some reason it was set to Bridged ethernet (I don't recall ever changing this) so I set it to Shared networking and then started up the VM/XP and now it can connect to the network OK. I suggest HowardN checks this too. Thanks for your help Elric.