I have not tried Parallels so I can't comment on it, but VMware Fusion works awesome for me! I installed and ran it with no issues. Works great on my 2Ghz MacBook with 1GB of ram.
I then uninstalled it, installed Bootcamp, and then reinstalled VMware. VMware will work with your previously installed Bootcamp partition. And it works great! I figured since I have to install WinXP, I might as well put it in a Bootcamp partition in case I ever want to boot into XP for finicky apps or to play a game!
VMware has my vote. If you pre-order now during the beta, it's only $39.99. I'll be ordering it!