As far as Vista + Parallels Desktop are concerned, I was surprised to learn that the only version of Vista that seems to work is the slightly older public beta 2 - not the more recent RC1 we've briefly mentioned. The pre-RC1 (I just found out RC1 went public the other day from sister blog Download Squad, so it'll be a while before I have a copy) kept crashing before the installation even began, but the beta 2 installed without a hitch, though YMMV.
Most users will probably opt to go through the basic VM (virtual machine) setup; just make sure you chose the new Vista option (pictured - and note the 'experimental' warning) when specifying which OS you want to set up (if you don't see this option, you don't have the latest beta). Parallels, by default, will then give the Vista virtual machine 16GB of room to work (as opposed to the 8GB default WinXP receives), as these public betas and release candidates are Windows Vista Ultimate, the bulkiest and most feature-packed version (of which there are 7, believe it or not) of Microsoft's upcoming OS. Vista Ultimate will need around 10GB of space itself because of all the extra Media Center and business features that are included. If you want more (perhaps you plan on installing all sorts of extra software), be sure to increase that space in the VM's configuration before you run it for the first time and begin installation.
There are a couple of setup quirks I have found so far: Parallels doesn't seem to be able to bridge Vista's networking to use AirPort, so I can't get online wirelessly. While I haven't gotten around to trying an ol' fashioned CAT5 cable for internet access, I would hope that Parallels at least got that working so users aren't left completely offline. Also, USB seems to work, as my Microsoft Intellimouse Explorer gets along with Vista just fine, but I have no idea if that recently beefed up USB support Parallels announced works with Vista to enable things like Smart Phones, PDAs, etc. I owned an HTC Wizard (aka, Cingular 8125) for roughly two days before I got fed up with the ridiculousness that is Windows Mobile 5. This is getting off topic, but just thinking about WM5 makes my mouth water for an Apple PDA on September 12th (yes, I know it isn't going to happen).
Honestly, if you've ever performed a Windows installation, this is pretty straight forward. Just like I explained in our previous How To: Run other OSes on your Mac with Parallels Desktop post, you might need to edit your Vista VM's CD/DVD-ROM options before your first run and installation, depending on whether you're installing from a disk image (pictured below) or using optical media.
I personally chose to use a disk image off one of my external hard drives, simply because it moves a lot faster than using a CD or DVD.
Aside from that option, you should be set to go. Fire up the virtual machine and get down to business. One refreshing change in Vista's installation is that Microsoft removed the necessity for any user input during the process, so you can (finally) start it and walk away (Windows XP, by contrast, requires things like network setup, naming the machine and choosing other software features during seemingly random portions of its installation). Once Vista finishes, it restarts and takes you to a user login, as Vista now also requires a user password (hooray!) to be set during the initial configuration of its installation process.
Gotchas other things to look out for
Like I mentioned earlier, Vista will run decently, but not everything will work. Audio seems to be fine, at least on my MacBook Pro, but again: you won't be able to experience the flashy 3D and TET stuff. Installing the Parallels Tools (designed for Windows XP) that enable stuff like mousing and copy/pasting text seamlessly between OSes goes fine, but none of those features seem to work in Vista, even after restarting the VM. I also tried installing the latest set of drivers that Apple lets you create with the most recent version of Boot Camp 1.1, but the installation unsurprisingly never goes very well and crashes with a fatal error (after all, the drivers are made for WinXP, not Vista). Other features that Apple just enabled with the latest Boot Camp like keyboard controls for brightness and audio don't work either; you'll have to resort to using system tray icons or any other Windows utilities or haxies you can find. Finally: right clicking doesn't work either; you'll have to use an external mouse, and probably USB at that. I highly doubt bluetooth works, as I'm not even sure bluetooth works with Parallels and WinXP (anyone know for sure?).
While it works, Parallels Desktop + Vista is definitely still experimental, and I in no way blame Parallels for that. A lot of the reports I'm seeing about this new version of Windows say that it too should still be considered 'experimental,' so I'm sure it's difficult for our virtualization overlords to give the OS any kind of decent foothold to work under Mac OS X like this. Parallels says they have support coming before the end of 2006 for the high-end hardware graphics cards built into most Intel Macs. However, if your main reason for firing up Vista is to goof around and check out all the pretty eye candy, your best bet is still to install it via Boot Camp, as Vista will actually be able to take advantage of your Intel Mac's fancy graphics card (save for the Mac mini) and strut its stuff.
Speaking of Boot Camp, stay tuned for a Vista + Boot Camp post, as there's a bit more good news in terms of performance and compatibility via that method. For now, however, I hope this helps you get Vista installed under Parallels Desktop, and I'll try to answer any questions you may have.