I started my Ubuntu virtual machine to get my networking file to continue looking into the network not starting automatically.
A notice came up about upgrading from 7.04 to 7.10. Without really thinking about it (stupid) I went ahead and ran the upgrade. It worked fine till it was finished and it restarted and the X display couldn't start. So I did what I should have done before I started the upgrade and I googled for problems with 7.10 on Parallels. Sure enough, lots of other people were having the same problem. There were various suggestions of how to work around the problem but there didn't seem to be a consensus. Parallels themselves seem to be avoiding the issue. I followed one of the suggestions and booted in recovery mode, which took me to a terminal window but I wasn't sure where to go from there. Then I tried booting the older kernel which seemed to start ok. Then I tried re-installing the Parallels tools (another suggestion). It ended up with the same problem of not being able to restart the display. I stopped and restarted the machine and let it boot normally and it worked!? I have no idea what that means. Is it fixed? Which part of my thrashing around was helpful? Or is the problem intermittent and I just happened to get lucky?
I'd had enough for one day so I just suspended the machine and left it.
By the way, it still has the same problem of not starting the networking automatically. I guess it was too much to hope that problem would go away by itself.