By default, Parallels configures Windows 7 so that your user is the Administrator. This is not like an administrative account in Mac OS X; it's more akin to logging in as root: you'll never see the Windows authentication prompt, and you have full power over the entire system. This is not a good thing--Windows 7 actually disables the Administrator account by default. I'd recommend creating a new normal user and logging in as that user, not as the Administrator.
Once I was up and running, I ran Office 2010, Adobe Acrobat, and a number of other general application programs. They all ran without troubles and never felt slow in any way. I also tested a number of games (which are great ways to stress-test virtual machines). Overall, I was amazed at the performance I saw. Parallels can provide up to 1GB of video RAM, which means that even some newer games with large texture sizes will run reasonably well; I was able to play the demo of Hard Reset, an intensive first person shooter, at decent (though not great) frame rates. Older games, such as Microsoft's Flight Simulator X and Crysis, ran very nicely, with smooth graphics and audio. Even the demo of Call of Duty 4, which ran but with jerky-slow framerates when I last tested it with Parallels 5, is now playable.
While testing the games, I was also able to test Parallels' support for USB peripherals, which turns out to be quite good. I used a Bluetooth mouse, a Saitek flightstick, a generic gamepad, and a Logitech Momo force feedback wheel and pedal set, all of which worked fine. The only exception was that the force feedback in the wheel isn't active within the virtual machine. When you connect a USB device, Parallels provides a nice visual dialog box for selecting how it should be assigned, and whether that assignment is permanent or temporary.
For protection against Windows malware and viruses, Parallels includes a 90-day trial for Kaspersky Internet Security. I didn't use this, however, as I chose to use Windows own (optional but free) Security Essentials. So far, my virtual Windows 7 installation has stayed free of viruses and malware (at least according to Windows itself).
Overall, I had almost no issues with running Windows 7 in Parallels. The one blue screen I got occurred after I'd switched multiple times--over a network connection via screen sharing-- between viewing modes. Printing on shared printers worked, high definition video playback was fine, I could access my Mac's hard drive, and I was able to copy and paste both text and images between OS X and Windows 7 without any problems. I was even able to use the MacBook Pro's built-in iSight camera to hold a video chat (via Windows Messenger) with a user on a Mac.
OS X as a virtual machine