- You can just use the common MacOS X window resizing operation by dragging the corner of the Parallels window.
- Also you can resize the window by changing the screen resolution in the guest OS display settings:
- Right-click your Windows XP desktop
- Select "Properties" in the appeared menu
- Select "Settings" tab in the window appeared
- Set the "Screen Resolution" slider to lower value, e.g. 800x600
- Additionally, please open Parallels, go to Preferences, Appearance menu and uncheck "Change Mac OS X resolution".