How to activate Windows XP from Windows 7 compatibility mode on MacOS Parallels 5

• I am running Parallels Desktop 5.0.9344 for Mac.
• I am running Mac OS 10.6.3 10D2094
• I have bought a retail copy of Windows 7 professional specifically because I need the XP compatibility.
• Windows 7 is installed and working.
• I have problems with the XP activation

Windows7 'Virtual PC' does not run under Parallels (strange error about Server Execution failed 0x80080005).

I have used the Parallels Transporter to convert the "Windows XP Mode Base.vhd" file into a parallels Virtual Machine. This copy of XP now starts normally, however it records itself as unregistered. There was a KEY.txt file in the same directory as the .vhd file; although this file contains a valid-looking activation key, it does not appear to activate the instance of XP. I have also tried to enter the Windows 7 activation key; this does not work either.

I have tried calling the two phone numbers; an automated system asked me to enter 56 digits through the telephone and then accused me of being a pirate.

I believe it may be possible to install Windows 7 via Bootcamp, start Windows XP under Virtual PC, activate it and then import this activated .vhd into Parallels; but that seems a long way round, and is far from certain.

What can I do to get Windows XP running under Mac Parallels Desktop ?

The XP Mode VHD will only accept that key if it's running in a Windows 7 version of Virtual PC. It will not take that key otherwise. Also the license does not entitle you to run the XP Mode VHD from anything else (just in case you're thinking about asking for a way around this little 'feature').

You can still use a valid XP Retail key to activate Windows however.