I just installed Windows 7 (Professional 32 bit) on Parallels (4.0.3846) on my iMac (OS X 10.6.1)
The install went smoothly and relatively quickly.
You still can't use Aero (fancy effects like transparency) under Parallels but that doesn't bother me too much.
My first challenge was that I couldn't see the task bar in Coherence mode (mixed Mac and Windows). A quick Google search found other people with the same problem. Eventually I discovered that there is a menu option to show it (Applications > Show Windows Task Bar). I wonder if it wouldn't be better to show it by default and let the people who want to hide it go hunting for the menu option.
My network icon in the taskbar shows a yellow exclamation mark warning, with a tooltip of "No internet access", but I seem to be able to access the internet fine through Internet Explorer and Windows Update worked fine. When I run the troubleshooter it tells me everything is fine and asks what my problem is. I guess I just ignore the warning. Hopefully Parallels will fix this at some point.
Windows 7 has dropped the Quick Launch bar. Instead you can "pin" things to the task bar. Except that I couldn't. I tried dragging and using the right click context menu. No errors or anything, it just didn't work. More Google searching showed other people with the same problem but no clear solution. Someone suggested setting up a new user account. This didn't really make sense, but I tried it and it worked.
I guess the default initial Administrator account doesn't let you pin anything to the task bar. It would be nice if it gave you some kind of message.
If the default initial Administrator account is not a regular account, why doesn't the Windows install process create a regular account for you? Maybe because of installing via Parallels "unattended" method? I'll have to ask someone who has installed Windows 7 on a PC.
One of the few features that the Windows task bar had that the Mac OS X dock didn't was the ability to toggle between showing and hiding windows by clicking on the task bar icon. (A Windows Feature I'd Like on the Mac) Sadly, this feature seems to be gone in Windows 7. (Unless there is a way to enable it somewhere.)
I've been using Vista on Parallels, but I probably would have been better off with XP because it needs less resources. (That's why Netbooks come with XP.) I'm hoping Windows 7 will be less demanding than Vista. (It's supposed to be.)