There seems to be some confusion about Boot Camp and Parallels. Let's see if this will clear it up.
Boot Camp is a product of Apple itself. It allows a user to boot either to OS X or to Windows OS. You choose at boot time and it is one way only requiring a reboot to get to the other. When you boot into windows you are in all reality booting to windows just like any other windows pc machine. You are subject to all the same little nastys like viruses, torjans, spyware, and all the other little nasty things windows users know about all to well. Because you are in Windows.
Parallels is a product of another company that when you install it on your Mac and start it will set up a virtural machine that allows you to install into that machine a copy of Windows. From the OS X desktop you simply click on the Parallels icon and it will boot up Windows either in a window or full screen if you wish. You can have both Windows and OS X running at the same time and switch back and forth at will if you wish. Once you close the Windows virtural machine you are right back at the OS X desktop.
I might mention that while you have the virtural machine going and have windows in operation, you are also subject to all the above mentioned nastys just as if you were running a windows pc and will need virus protection and should be running all the things like firewalls and such just like you normally would on a pc.
Version 3.0 of Parallels has made some good improvement as far as running pc games go. Probably not all games will run, but many now do, but if your a die hard gamer i would recommend going with Boot Camp still at this time.
The main advantage of Boot Camp is games and drivers, you are actually a pc machine when using it. The main advantage of Parallels is the ability to switch back and forth or work together with out having to reboot all the time. For normal windows programs like word processors and data bases and such, i haven't found one that doesn't work just fine under Parallels.
And, yes, if you have Boot Camp installed you can if you wish also install Parallels and have it use the same copy of XP that you already have installed with Boot Camp, though i find that a bit of over kill for the majority of people.
Which ever way you go you will need a copy of Windows. I recommend using XP myself, it is fairly stable and works just fine. Vista can be used, but your just opening your self up to a whole new can of worms. I know, M$ is fixing things, but personally i wouldn't load Vista until at least 3 or 4 service packs have been released.
Hope this clears up any confusion about Boot Camp and Parallels...