So, XP SP3 is pretty finicky about Parallels Desktop. After hours of Windows install after grueling Windows install, I have determined that if you want to be able to run XP SP3 in a Boot Camp partition both natively, and in a Parallels virtual machine, you MUST do the Windows install in THIS PRECISE ORDER:
- Boot XP SP2 on the hardware.
- Install Boot Camp 2.1.
- Install the SP3 update.
- Reboot to Mac OS.
- Launch Parallels but DO NOT start the VM.
- Clear the Parallels information out of the Boot Camp partition (it's in the "Advanced" tab in the Hard Disk config screen).
- Start the VM and let it boot Windows.
- Let Parallels Tools reinstall itself.
Doing things in any other order, especially installing SP3 from within a virtual machine, results in Windows crashing on boot either in Parallels, or on the native hardware, or both.
I've totally had my fill of installing for a while. On the bright side, my brand new 24" iMac is finally fully up and running. Now I'm off to Bedfordshire.