SmartMount is a new feature that mounts removable drives in both the Mac OS and the guest OS (Windows or Linux). In my testing, this worked nicely with Windows, and being able to use an external CD burner or USB stick in both operating systems at the same time is a real time-saver. When I tried to use SmartMount in Fedora Linux, however, I had no success; I could mount a USB stick in either the Mac or Linux OS, but not in both at the same time. (Another limitation of SmartMount is that your guest OS capabilities are restricted to those of the Mac OS. So an NTSF-formatted hard drive, for instance, will have read-only privileges in Windows, because that's all that Mac OS X can do with NTSF drives.)
Parallels 4 includes SmartGuard, which allows for automated snapshots; a snapshot is a form of virtual machine backup that doesn't require huge amounts of drive space. SmartGuard automatically takes a snapshot on some multiple of an hourly basis, and keeps multiple prior snapshots. Parallels saves a mix of hourly, daily, and weekly snapshots, enabling you to easily move back to an older version of your virtual machine. Given that Time Machine doesn't work well with virtual machines, SmartGuard is a reasonable alternative for effectively backing up your virtual machine.
Parallels 4 includes a useful bundle of Windows utilities: Acronis Disk Director for resizing disk partitions; Acronis True Image Home for automated backups, file shredding, and system cleanup; and Parallels Internet Security powered by Kaspersky (12-month subscription) for virus and malware protection. All worked well in my testing, though you'll only need Disk Director if you have to resize the hard drive in your Windows virtual machine.
The other stuff
Given that Parallels uses the word "fast" to describe Windows in Parallels 4, I was expecting some notable speed increase when running XP and Vista under Parallels 4. However, my experience -- both quantitative and qualitative -- didn't match those expectations. Neither OS feels appreciably slower or faster than it was under Parallels 3. When I ran the PassMark benchmark suite, the results bore out my subjective assessment. Scores improved in some categories (3-D graphics), but others worsened (2-D graphics, memory). Overall, the two versions of Parallels scored roughly the same on the PassMark tests.
So what's going on? Parallels 4 claims that the speed boost is due to support for Intel's VT-x2, the next generation of virtualization technology in Intel's CPUs. As of today, however, no Macs include this technology. (Note that Fusion 2 also includes support for VT-x2.) In addition to VT-x2, however, Parallels support more RAM and CPUs in virtual machines: you can now configure up to 8GB of RAM and eight CPUs on a virtual machine, which can improve speeds in some situations. I tested Windows XP Pro with two and four virtual CPUs on my Mac Pro, and found that the CPU rating in the PassMark benchmark improved by 68 percent when I used four CPUs. CPU-hungry applications that run in Parallels on a four- or eight-core Mac Pro should see a nice performance boost.
Though the overall speed hasn't increased noticeably, guest OSs in Parallels 4 aren't slow by any stretch. I conducted my tests on both a 2.66GHz Mac Pro quad core and a 2.5GHz MacBook Pro, and found that files and applications opened quickly, the UI was responsive, and XP, Vista, and Linux all seemed quite stable. Windows Vista is quite usable in Parallels 4, though it works best if you disable as many of the graphical enhancements as you can, such as the Windows sidebar and showing window content while dragging. I also found that Parallels 4 uses less CPU power than its predecessor when performing the same tasks, which should help preserve battery life for those using Parallels on a laptop.
Multimonitor support is somewhat lacking in the guest operating systems, as Parallels doesn't create virtual monitors within the guest OS (as Fusion does). So you can't, for example, have PowerPoint use one monitor for the presentation and a second for the notes, because Parallels sees only one super-large monitor. Coherence mode does work across multiple displays, but you'll need to enable this in the Coherence section of the virtual machine's configuration screen.
To test Parallels' ability to play back Windows HD media files, I used a 720p HD sample movie from Microsoft's own HD Content Showcase site. In Windows XP Pro virtual machines, playback was perfect in both windowed and full-screen mode. When I switched to Vista Business, however, I experienced a problem with windowed view -- the movie showed up completely black. If I switched to full-screen mode, I could see video, but the frame rate was very slow. (The full-screen frame rate problem isn't specific to Parallels; Fusion and VirtualBox both have trouble with full-screen video playback in Windows Media Player.)
One final issue I ran into is that you can't even view the configuration screen for a suspended virtual machine. Doing so will force the virtual machine to shut down, possibly causing data loss. (A dialog box warns you about the forced shutdown, so this isn't something you're likely to do by accident.) Still, you should at least be able to view the configuration settings for a suspended virtual machine, even if you can't change them.
Parallels 4 offers a number of new features that some users may find compelling -- additional virtual CPUs, SmartGuard, SmartMount, the bundled Windows software, and the Modality display mode, to name a few. It also offers a level of Windows/OS X integration not available in either VirtualBox or Fusion, it uses less CPU power than its predecessor, and it includes free tech support.
If you're presently using Parallels 3 and are happy with its performance, I would hold off on an upgrade until a few more of the kinks are worked out, especially given the $40 upgrade cost. If you're new to the world of virtualization on the Mac, Parallels 4 is a solid performer with some annoying "new version" bugs; they're nothing disastrous, but they'll require a software update or two to correct. If you run apps that require tons of CPU power on a four- or eight-core Mac, Parallels 4's ability to use up to eight virtual CPUs gives it a decided edge over the competition. For people with less CPU-intensive needs, however, VMware's Fusion 2 may offer a more polished solution.