All I can say is this: I have been working with VM products for over a year at work and have found several I like, a few I don't like as much, and a BUNCH of niche products. Parallels does have some drawbacks from what I have heard and seen, though I have not tried the Windows Version. If you are a MAC user, though, VMWare Fusion is a nicer product with many of the same qualities and a lower price. The main ones I have seen in detail that I like and have worked with are below.
On the Windows side, I have found it really depends on what you are doing and are willing to spend to get it done. By and large, MS Virtual PC is the absolute best way to go for OS virtualization. It is a bit heavier on resources than VMWare, but it is free and allows you to create virtual machines. It also allows for many of the nicer tools to manage and work with the virtual systems. VMWare Workstation is the main competitor here (in my opinion). It has many of the same options but more refined controls and just a better feel to it. It also allows a business to work up and down the "Virtual Path" without having to change toolsets. That said, the price is definitely steep. Is it worth it? Depends on your situation and what you already know I suppose.
However, if you find yourself wanting to use virtualization for sandboxing (primarily) on only one OS, you may want to look at Altairis. Altairis VSN is an APPLICATION virtualization product. Basically it has a layer that sits on Windows and wraps all other programs in a wrapper. This wrapper provides all DLL's and other software resouces by copying the file and using the copy. This isolates each program and prevents it from conflicting with other applications. The down sides are you are tied to one OS and cannot use the virtualization to try different things such as useful for trying new code on the fly. On the up side, it provides businesses with a quick and easy package for installing software and it moves the virtualization hit from the memory to the disk.
Lastly, one I really like (though it isn't free) is a hybrid between the two. Virtuosso is a OS Virtualization product that works differently. You can only virtualize additional copies of the host OS, because it takes the files of the OS itself, copies them, and uses them to make completely independent virtual machines. This seems to me to be a very efficient way to make virtual machines, particularly for the servers. One machine to upgrade upgrades ALL virtual machines because they utilize the same files. It also offloads some of the memory hits you get from traditional OS virtualization options. With VMWare, for example, running 4 OS's at the same time (not including the host OS that still requires resources) brought my machine to a crawl with 3GB of memory and each VM utilizing only 256MB (they were lightweight Linux machines). With Virtuosso, however, you can run up to 100 copies of the host OS (or so they claim, I only ran 5 copies on the same 3 GB machine, but didn't take a significant performance hit like I did with VMWare). On the down side, if you are using virtualization to try different OS's or even for various OS environments, this will not do. As already mentioned it only allows the host OS to exist virtually.
My uses of virtualization were to try to test programs in as many environments that are at work as possible. As such, I needed OS virtualization, and since we already had VMWare, I utilized that. In a server environment, I would likely try to run Virtuosso from SWSoft, or VMWare ESX/GSX depending on other mitigating circumstances. For personal development - all other things being equal - I would use VirtualPC, and for application management and software distribution, I would use Altairis (well application virtualization anyway, I would have to determine what fits in this realm best as this is one area I didn't dig too deep in).
Sorry to ramble on, but my point is the best product to use depends on your purpose, as usual. Hope this helps a little...