Symptoms

I am unable to install Parallels Tools in my Windows XP virtual machine. Parallels Tools installation hangs for some time at 74% and then crashes.

Cause

Windows registry misconfiguration

Resolution

1. Click on Start -> Run.. > type 'regedit' without quotes and hit Enter/Return.

2. Go to HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows NT\CurrentVersion\Winlogon

3. In Registry Editor UI click Edit > New > Key

4. Name new key as Notify, so the full path would be HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows NT\CurrentVersion\Winlogon\Notify

5. Close Registry Editor window, restart the virtual machine and install Parallels Tools again.