Those Service Packs are cumulative, you only need to install the latest. And since this is XP, you can even slipstream an installation CD with the Service Pack - in other words: You bring the installation medium to SP3 level and don't need to install the service pack separately anymore, that way you'll have a clean installation of Win XP SP3.The more service packs and patches you need to install, the slower the operating system seems to get. That said, you need to install 3 service packs and dozens of patches to get XP up to date and as secure as possible, while Windows 7 hasn't had a service pack yet. Windows 7 feels much faster than Windows XP SP3, though I'd imagine that a clean install of Windows XP would be comparable in speed, but dangerous if you connect it to the Internet.
You can do a clean install of Windows 7 with upgrade media, you just have to change a value in a registry key to allow the product to be activated.
You can do it by following one of three methods on this webpage: http://www.winsupersite.com/win7/clean_install_upgrade_media.asp
It's perfectly legal. Microsoft even allows it because people thought the upgrade edition where a bit stupid.
I have done this method myself with using upgrade media and it works perfectly.
There are many benefits upgrading to Parallels Desktop 5. Windows 7 runs better in Parallels Desktop 5. Read this MacTech article http://www.mactech.com/articles/special/0912-ParallelsUpdateComparison/ and tell me what you think.Does Window 7 run well in Parallels 4? Or do we need 5?