What is the advantage of virtualization compared to dual-booting?

In basic terms, the primary advantage of virtualization is that it allows one to run multiple operating systems "inside" or "alongside", if you prefer, another one.

For example, you could run Windows "inside" MacOS X rather than booting back and forth between them. Indirectly, virtualization also can allow you to copy and paste between operating systems, a major advantage for productivity applications.

Virtualization is slower than directly booting an operating system, and consequently, is not generally considered an ideal solution for gamers. However, Parallels is hard at work adding support for hardware accelerated 3D graphics, OpenGL, and DirectX to the next version of their software as well.

Which versions of Windows are supported by Parallels?

Parallels Desktop for Mac supports effectively every version of Windows, as well as Linux, FreeBSD, OS/2 Warp, eComStation, Solaris, and MS-DOS "in secure virtual machines running alongside Mac OS X".

How do you install Windows using Parallels?

Parallels has provided a downloadable User Guide and Quick Start Guide to walk you through the process of installing Desktop for Mac and subsequently Windows in a "virtual machine". You also may find the extremely in-depth set of installation instructions for Parallels' software and Windows XP from the excellent Ask Dave Taylor website helpful.

Does Parallels install Windows drivers?

Parallels Desktop for Mac installs drivers for a variety of hardware, including some USB 2.0 devices starting with "Beta 2" released on December 21, 2006. However, not every device on the planet is supported. If you require complete hardware compatibility, you might be better served running Windows XP via Boot Camp.

How can I uninstall Windows and Parallels?

The final version of Parallels Desktop for Mac includes an easy to use uninstaller program.

Is Windows XP fully functional when using Parallels?

Apart from not supporting DirectX 3D graphics acceleration and some hardware devices, Windows XP is fully functional running the final version of Parallels Desktop for Mac. Parallels is hard at work adding support for hardware accelerated 3D graphics, OpenGL, and DirectX to the next version of their software as well as improving hardware support.

Can you access Mac files from within Windows XP? Or vice versa?

Yes. Parallels notes that you can easily share files and folders between Windows and MacOS X:

Using the Parallels Shared Folders tool, you can easily share documents and folders, or cut and paste data, between any Windows XP, 2003 or 2000 virtual machine and your Mac OS X machine.

Starting with beta 3036, Parallels goes a step further, adding the ability to "drag and drop" files between MacOS X and Windows. The beta of VMWare Fusion also promises drag and drop capabilities.