1.5 Problems With Parallells 5.x
 

This first issue has been a problem during all 1.5x versions and it still remains. If Parallels 5.x is running and OS X display sleep engages, upon waking my MacBook Pro, I lose the ability to move my cursor to my USB-connected display (connected via VillageTronic ViBook). If I try to move my cursor to the USB-connected display, the cursor acts like it's bouncing into a wall. If I quit Parallels and OS X display sleep engages, I do not lose my ability to move to my cursor to the USB-connected display. The key here is whether or not Parallels 5.x is loaded.:mad:

This second issue appeared since the release of OS X 10.6.3, DisplayLink drivers 1.5 - 1.6x cause Parallels 5.x's screen to go black. I'm currently running Windows Vista Ultimate with my Parallels 5.x. After installing DL 1.5, Parallels loads, Windows loads (you can actually see the small Microsoft progress load bar for a few seconds), the window goes black, but you can hear the Windows startup sound, and then I'm left with a black non-functional window. If I uninstall DL 1.5, the problem with Parallels dissappears. Supposedly Apple made some siginificant graphics routine changes in 10.6.3. I'm now not able to use my USB-connected display at all because I have to be able to use Parallels (company uses Outlook).:mad::mad::mad:

Known issue with Parallels 5 and Displaylink drivers
 

All,

I copied this from the parallels forums. Note that it starts out discussing a different issue that the "black screen' but the issue is mentioned and a link provided. I have tried the workaround and it does work. No word yet on the release of the update.

Kurt

Recently a few problems turned out to be related to DisplayLink drivers. The exact USB-to-DVI brand doesn't matter as long as it is based on DisplayLink chip.
In your case of Windows 7 BSOD I suggest to completely uninstall DisplayLink driver from Windows. We're contacting DisplayLink to discuss the issue.
If you have DisplayLink drivers installed in OS X 10.6.3 your Windows 7 VM may boot into black screen. This issue is discussed here (http://forum.parallels.com/showthread.php?t=100374). The simple solution is to unplug USB-to-DVI box before starting the VM and plug it back once VM is started. If you need Windows 7 to use three displays follow these steps:
1. Shut down your VM
2. Right-click on the VM and choose Show Package Contents
3. Right-click on config.pvs and choose Open With > Other...
4. Choose TextEdit application to open XML based VM configuration
5. Cmd-F to find "MaxDisplays" tag:
<MaxDisplays>0</MaxDisplays>
replace value 0 with 3 (or more if you have more than 1 USB-to-DVI adapters)
6. Save changes and restart your VM
Note that this manual setting overrides display autodetection. It is recommended that you reset this change later when fix is included in Parallels Desktop.

We plan to resolve these issues in the next update of Parallels Desktop 5, but there's no date yet, it's in the works.