SymptomsAfter upgrading Windows XP to Windows 7 from inside the Virtual Machine, there is no internet connection in Windows 7. The driver for the network adapter cannot be installed even if Parallels Tools are installed.
CauseMost likely, your virtual machine is running Windows 7 but is configured as Windows XP. This causes different network adapter types for your virtual machine to be emulated and the driver will not install.
Resolution1. Open virtual machine configuration and change the OS type for your virtual machine to the correct one - Windows 7
2. Click OK to save and close the configuration window. Then, start the virtual machine and install the network adapter (if it does not install automatically)