Parallels Desktop 3.0 on Snow Leopard

We would like to upgrade to the new Snow Leopard OS.
However we are presently running Parallels Desktop 3.0 for Mac on the OS X Leopard software. Part of the decision to upgrade to OS X Snow Leopard will depend on being able to do a smooth transition for Parallels when we do the upgrade.
Has anyone gone through this yet and if so can you tell us if you have encountered any difficulties with running Parallels 3.0 once you have done the upgrade.
Thanks ... Lyndale

I can attest to the fact that Parallels 3 will not work with SL. I learned the hard way three days ago. I jumped on SL as soon as it was released in my locality. Alas after completing the upgrade I realized I couldn't open my Windows XP VM. Having many mission critical tasks based on the VM, my quick fix was to upgrade to Parallels 4 (something I had always hoped I would never have to do).
For the most part the upgrade to Parallels 4 in SL was a breeze. There were no problems with the VM side. All applications were functioning and there was no trouble with the data. The caveat: Parallels Tools is not fully functioning no matter how much I tried to reinstall it. I encountered the following:
1. Mouse synchronization not working between host and VM (I'm stuck with having to hit ctrl + alt to release cursor all the time)
2. Dynamic resolution tool not working (guest OS window not resizing automatically)
3. Coherence is not working
The other tools seem to be working fine: clip board and time synchronization, shared profile and applications tools, and parallels compressor. It is more of a convenience issue of seamlessly working between host and VM, but a convenience I sorely miss. It appears from Parallels Forums that a significant number of users are experiencing this trouble. No working solution for me yet, but let me share the three options offered by Parallels Support:
METHOD 1: Uninstall and Re-install Parallels Tools using the VM Control Panel => Add and Remove Programs (http://kb.parallels.com/en/4841) followed by reinstall of Tools from the Virtual Machine Menu of Parallels Desktop.
METHOD 2: Uninstall Parallels Desktop using the latest dmg file (build 3846) then re-installing using the same. You won't lose your VM with this trick, but it didn't work for me still.
METHOD 3: Alternate method of re-installing Parallels Tools by connecting the VM to an ISO image (prl-tools-win.iso) in your /library/parallels/tools folder (placed there during initial install of Parallels 4) then installing tools from the VM side.
Apparently the above workarounds have worked for some. I am still hunting for the solution that will work for me (any suggestions from the gurus out there?). I miss Parallels 3 now, but I'm still hoping I never need to roll back to 10.5.8.
Consider these when thinking about your planned upgrade.

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