
This is a walk through on how to install the Windows 7 Beta (7000 build) in Parallels 4 (4.0.3810). First you’ll want to download beta located on
Windows 7 main page and, if you haven’t already, upgrade
Parallels 4 to the latest build.
My install was painless (running the OS initially not so, but I’ll get into that later) and took about 35 minutes till I was booting up Windows 7 for the first time. For reference, I am running an early 2008 Black MacBook (Core 2 Duo 2.4 GHz - 4 GB Ram - 250 GB HDD).
So lets start shall we!
1. Start Parallels and begin to create a new virtual machine.

2. Begin the New Virtual Machine Assistant.

3.Operating System Detection.

For this step, you’ll just want to locate the Windows 7 iso file, I just kept it on the desktop for simplicity. There’s really no need for you to burn the iso and it will install faster from the hard drive anyway.
4.Operating System Detection - Options.

If you have the latest build of Parallels (4.0.3810) it should automatically detect Windows 7 and begin to install it as Windows 7 (experimental). Here you will have the options to enable file sharing and enable user profile sharing. If you expand more options, you will also have the ability to create an icon on the desktop and share your virtual machine with other mac users.
New to Parallels 4, if you click on advanced, you can change the number of cpu’s (up to 4, 8 experimentally) and specify the amount of RAM (up to 8GB).

5.Prepare to Install Operating System

You’ll want to select the same thing you did earlier in the assistant, real CD or ISO. Once you click on start, let the installation begin!
6. Start Windows 7 beta Installation.

Now it is time to start the real installation. It is your typical windows installation, should be no troubles here. Instead of looking at the green bar slowly get to completion, get up, leave the computer, and do something else. It’ll take about 20 minutes and there isn’t anything else you’ll have to do. Parallels automatically selects most settings and will install Windows 7 Ultimate by default.
7. Starting Windows 7 for the first time.

8. Install Parallels Tools.

You’ll need to be able to view the Parallels menu bar for this step (press ctrl-alt if you are in full screen mode). Click on Virtual Machine, Install Parallels Tools will be near the bottom of the menu.



You’re Done!

Once the Parallels Tools are installed, Windows 7 will reboot and you’ll be ready to test out the Windows 7 Beta.
As it states in the install, it is “experimental” and I have noticed some quirks already to see why. Many users having be having issues with Windows 7 locking up while running some programs (Windows Live Messenger, some Windows games) as seen on the Parallels forum. It seems with that with the 3D acceleration enabled, that this occurs. You can disable it by clicking on Configure on the Windows 7 Beta start window.

I have noticed that some of the
new windows goodies do not work in Parallels, most likely due to the drivers, but that could be updated in future Parallels builds. Overall I am extremely impressed at how easy the install was, considering that the beta just went public last Saturday.
One nice feature that seems to be only native to Windows 7 beta and Parallels 4 is the ability to mirror the desktop. I hope this feature is available for older versions of Windows in a future Parallels update.

Here are some links I've found helpful:
Parallels Forums
Lifehacker
Gizmodo
The Windows Blog
Have you by chance read of other people's experience on installing and running Windows 7 through Fusion? I'm curious to know if it operates smoother vs. Parallels.