The parallels VM is just a file like any other file on your mac so it will get backed up.
The downside is that TM will back it up every time, and windows VMs are usually large so you'll be chewing up large portions of your time machine drive just for that one file
Sorry if this is a dumb question but i just ordered my first mac. Every time it backs up it will back up another 20 gigs? or just write over what it had before? So if my hard drive is replaced i just have to go to my time machine back up and it will restore all my files including the virual machine just as it was from the last back up?
It will write another 20 gigs with each backup, not overwrite previous.
Sorry if this is a dumb question but i just ordered my first mac. Every time it backs up it will back up another 20 gigs? or just write over what it had before?
So if my hard drive is replaced i just have to go to my time machine back up and it will restore all my files including the virual machine just as it was from the last back up?
The issue is that, to OS X/Time Machine, your VM's entire hard drive looks like one giant file (or sometimes several slightly less giant files). This means that whenever you do anything at all inside of the VM, Time Machine will see it as that one giant file being edited and will have to create another copy of it in the backup.
Yes TM starts deleting old backs as the drive fills up.
I personally exclude my VM from Time Machine as I do not want hourly backups of the VM - that will fill up my TM volume in no time and defeat the incremental backups that TM provides. I manually back up my VM to an external drive as needed.