Windows 8 (.1) virtual machine image looks blurry with resolution lower than 1024x768.
The problem appear on 11" MacBook Air and old MacBook due to low display resolution. Windows 8 Metro apps do not work when your Windows resolution is less than 1024x768:
Hence Windows virtual machine is scaled if you set the low resolution.
To protect users from this problem, Parallels Desktop now has Seamless Modality functionality. This functionality automatically scales your Windows 8 virtual machine if you set the resolution below than 1024x768.
Here are several steps to overcome the issue:
Use virtual machine in the Full Screen mode (in Parallels Desktop menu bar go to View > Enter Full Screen).
On the displays larger than 11" move Dock to the left or right edge (in the top menu bar click Apple icon > System Preferences > Dock > Position on screen) and stretch the virtual machine window as possible.
Change virtual machine type to Windows 7:
- Shut down virtual machine.
- Open virtual machine configuration, go to General tab, under the Name of the virtual machine change its type to Windows 7.
NOTE: be ready for Metro apps failures to launch.