I also have a SP1 disc that came with my old computer that I no longer use. I pre-ordered a copy of parallels during the beta period and have installed my copy of windows xp home. However I was not able to update my copy of windows because microsoft's update website deemed that my copy of windows was not authenic

. I know that my copy is authenic because my CD has all the correct holograms and marking and worked without issue on my PC. However I was able to download the SP2 file from their website (
http://www.microsoft.com/downloads/...BE-3B8E-4F30-8245-9E368D3CDB5A&displaylang=en ). I installed SP2 and was subsequently able to recieve all the regular updates without issue using parallels.
I have been using the final version of parallels since the day it was released. I really like it and have been able to use both my samsung printer and usb memory stick with the software. I highly recommend it