The help was thanks to a prompt response of a support request from the company (so that’s a good sign). Ultimately the trick was to boot the 2.6.9-22.0.1.EL (i.e. not SMP) kernel. Of course the kernel I’m running is the default on my laptop. So really having no idea of the actual impact (obviously something to do with the HT technology I assume).
So, problem solved, will it have an impact on system performance with this kernel? Not sure. I’ve also been told that Parallels 2.1 will have PAE support, just waiting for the response to know if buying 2.0 gives me a free upgrade to 2.1.