My friend Jason upgraded his Parallels to the new version 3.
Here’s what he wrote:

“I upgraded to Parallels 3 over the weekend (because I got the upgrade free)
and am thoroughly disappointed. The only improvement it made is that you
need less video memory in your VM’s. Apart fromtaht it froms slow & requires
more resources thanb version 2.5.

The worst part is they changed the virtual HD format so I can’t roll back to 2.5.
Thought you’d be interested to know that…”

He’s running on a nice Macbook Pro and XP had been running decent.

VMWare’s Fusion beta 4 was just released. Running: it has a smaller memory footprint, XP is snappier, has some neat features (including a “Coherence” mode called Unity), AND you can convert for Parallels VM to a VMWare image.

Here are some instructions to create a new VMWare image from Parallels: vmware community forum thread

There are still some issues with the beta so I’m not totally sold. Like no multi-monitor support. But I’m sure they’ll fix it.