All,
I copied this from the parallels forums. Note that it starts out discussing a different issue that the "black screen' but the issue is mentioned and a link provided. I have tried the workaround and it does work. No word yet on the release of the update.
Kurt
Recently a few problems turned out to be related to DisplayLink drivers. The exact USB-to-DVI brand doesn't matter as long as it is based on DisplayLink chip.
In your case of Windows 7 BSOD I suggest to completely uninstall DisplayLink driver from Windows. We're contacting DisplayLink to discuss the issue.
If you have DisplayLink drivers installed in OS X 10.6.3 your Windows 7 VM may boot into black screen. This issue is discussed here (http://forum.parallels.com/showthread.php?t=100374). The simple solution is to unplug USB-to-DVI box before starting the VM and plug it back once VM is started. If you need Windows 7 to use three displays follow these steps:
1. Shut down your VM
2. Right-click on the VM and choose Show Package Contents
3. Right-click on config.pvs and choose Open With > Other...
4. Choose TextEdit application to open XML based VM configuration
5. Cmd-F to find "MaxDisplays" tag:
<MaxDisplays>0</MaxDisplays>
replace value 0 with 3 (or more if you have more than 1 USB-to-DVI adapters)
6. Save changes and restart your VM
Note that this manual setting overrides display autodetection. It is recommended that you reset this change later when fix is included in Parallels Desktop.
We plan to resolve these issues in the next update of Parallels Desktop 5, but there's no date yet, it's in the works.