Parallels 4: Cant install from disc image?

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Dec 1, 2006
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Your Mac's Specs
MBP 2.4/2GB/200HD/256 8600gt
I have a series of Windows cd's that I have backed up on to my machine in either .dmg, or .cdr formatted disc images.

Parallels 3, I could select one of these to use as install medium for a new machine.

Parallels 4 cannot select any of them, what gives?
 

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