If you want to conserve drive space on your Mac you can pick up a Firewire enclosure and run the Parrallels image from there.
This way as the Parrallels image grows in size you don't run out of room. Plus you can use the unused space on the drive as a backup destination for your OS X partition.
The other reason I do this is I have multiple machines, each has a Parrallels installation but the drive's are all mapped to the external. Let's me move from one machine to the other without having to keep data synced.
I buy these,
http://www.macally.com/EN/Product/ArticleShow.asp?ArticleID=201 can be found for as little as $20-30. Get a 7200 RPM drive to stick in it. They can be had for ~$100 for 100 GB's.
On a Mac Firewire is the only way to go with external drives. I have found that USB requires two ports to get enough juice to the drive. On Firewire I currently have 3 of these running simultaneously from one port.