I'm a avid Windows-on-Mac user, and have often explained the differences between the different ways to run Windows applications on Intel-based Macs with three bullet points for each. Because I see the question asked over and over, I thought I'd post those bullets here in the hopes it provides the quick answer to the differences between them. If people find this useful, I can keep it up-to-date as new features and versions are available.
"Which is best?" is a question I'm not trying to answer below, as that depends on too many other variables. Due to their similar approaches, it's hardest to answer that question for Parallels vs. VMware Fusion, but there's a good comprehensive comparison of VMware Fusion and Parallels Desktop on Wikipedia.
Boot Camp: part of Mac OS X v10.5 Leopard ($130 if it didn't come with your Mac), but you supply Windows
CrossOver Mac: $40 for standard or games versions, $60 for pro version with both and better support (+$10 for CD), no Windows needed
Parallels Desktop for Mac: $80 (+$15 for CD), but you supply Windows
VMware Fusion: $80 (not including $20-$30 rebate available), but you supply Windows
"Which is best?" is a question I'm not trying to answer below, as that depends on too many other variables. Due to their similar approaches, it's hardest to answer that question for Parallels vs. VMware Fusion, but there's a good comprehensive comparison of VMware Fusion and Parallels Desktop on Wikipedia.
Boot Camp: part of Mac OS X v10.5 Leopard ($130 if it didn't come with your Mac), but you supply Windows
- "Run Windows on your Mac." You can boot OS X normally, or boot Windows, and need to reboot when you want to switch. Almost all Windows applications, including games, work.
- Windows XP 32-bit or Vista 32-bit are limited to 2GB of RAM on a Mac under Boot Camp. Sorry.
- Driver support rocks on XP 32-bit or Vista 32-bit. The "early 2008" Mac Pros and MacBook Pros also ship with Vista 64-bit drivers (Boot Camp 2.0.1+), although no XP Professional x64 Edition support.
CrossOver Mac: $40 for standard or games versions, $60 for pro version with both and better support (+$10 for CD), no Windows needed
- Runs some 32-bit Windows applications natively under OS X, seamlessly, typically at native speed, including a few 3D games. CrossOver maps Windows API calls to OS X.
- The list of applications officially supported is short, notably most Microsoft Office-related applications, Internet Explorer 6 (not 7), some games (like Team Fortress 2, Half Life 2, Prey, etc.), Quicken, and Lotus Notes.
- Other Windows programs may work acceptably (like µTorrent) or may not (like most games, Internet Explorer 7, etc.) so it can be tough to rely on CrossOver exclusively if your Windows needs are broad.
Parallels Desktop for Mac: $80 (+$15 for CD), but you supply Windows
- Runs most 32-bit Windows applications in a virtual machine (VM) under OS X, seamlessly ("Coherence"), typically with a minor speed penalty due to virtualization, including some 3D games.
- High file integration with OS X, with files from the Windows VMs available to OS X ("Complete Shared Folders" and "Parallels Explorer"), and auto-launching Windows applications from OS X or vice-versa ("SmartSelect"). But, limited to 2GB of RAM per VM, with 4GB total across VMs and one CPU core.
- Multiple suspended snapshots of a VM supported ("Snapshot Manager").
VMware Fusion: $80 (not including $20-$30 rebate available), but you supply Windows
- Runs most 32-bit and 64-bit Windows applications in a virtual machine under OS X, seamlessly ("Unity"), typically with a minor speed penalty due to virtualization, including some 3D games.
- High access to memory and multiple CPU cores, with per VM access to 1-2 CPU cores and 8GB of RAM, and automatically shares memory that is common across VMs. But, limited to one suspended snapshot per VM.
- Compatible with VMware Virtual Appliances and Virtual Machines that are popular in Enterprise IT environments, including over 60 different operating systems.