I had expected to shift from Parallels to VMware when the latter made the jump to the Mac. Sure enough, when the VMware Fusion beta was released, I gave it a shot, and came away... underwhelmed. Admittedly, it's a beta of a v1 product, but it is not very full featured at the moment.
Parallels, on the other hand, has been serving me very well. Although it keeps a version number in sync with its Windows and Linux hosted counterpart, it too is essentially a v1 product. They've had three betas for the next release in the last few weeks, each one dramatically improving on the last (beta 3 is available here, announced here). Besides finally delivering USB 2.0 support, a lot of new features and bug fixes have been put in. There are two key features in the new Parallels: BootCamp Support and Coherence.
If you use BootCamp on your Mac, then BootCamp Support is a very welcome addition. This is the ability for Parallels to boot your BootCamp partition directly, allowing you to have a single installation of Windows usable both directly and in a VM. I haven't been able to test this mode yet, but there is enough talk on the forum for me to believe that it (mostly) works as advertised, and enough confidence that it'll be rock solid by RTM.
Coherence is the ability to run your Windows apps seamlessly on your Mac desktop. Here you can see a screenshot of my MacBook Pro running OS X and Windows XP in Coherence mode:
I auto-hide the OS X dock to the left (the dock is very rarely used, since I rely heavily on Quicksilver and would rather use Cmd+Tab and/or Cmd+~ to switch windows). I let the Windows XP task bar reside on the bottom of the screen. Coherence even allows you to see your Windows apps on the OS X dock, and keep them there for easy launching. This is rapidly approaching the holy grail of integrated OSes, and Parallels is getting there with tremendous speed and skill.
It's a wonder to me that Apple hasn't bought these guys yet and integrated the technology even more seamlessly into OS X.