You've got it just about down to a science.

Boot Camp allows you to divide a single hard drive, or use an extra hard disk in a Mac Pro, to install and run Windows just as you would on any other "PC". In this setup, the Mac acts like a PC because it is one, with the same innards as any other machine. Windows gets full use of all the Mac's resources, but remains in its own space on disk. It can't get to any files stored on the Mac side, which can be good or bad depending on what you do. However, this setup is best if you're doing anything resource-heavy like gaming. To switch between the two, as you pointed out, you use the Option key at startup.

Parallels and Fusion handle the concept of Windows quite differently. They are programs that run Windows in a "sandbox" from within the Mac OS. Each is not exactly an emulator, in the same vein as Virtual PC. Rather, each relies on your CPU's ability to virtualize, or create a "fake" PC without translating CPU instructions (called a virtual machine, or simply "VM"). It's faster than emulation, but slightly slower than using Boot Camp. VPC was an emulator because it had to expend CPU power from the PowerPC to create a phony Intel machine., and as a consequence, both Mac and Windows were poor performers--Windows even more so than Mac.

Neither Parallels nor Fusion has the muscle to create fake hardware powerful enough to run intensive apps, and so neither should be used extensively for gaming, Photoshopping, or other heavy work. Both can, however, use an existing Windows volume created with Boot Camp, at the cost of a second Windows activation and license.

With virtualization, you are also able to run any number of OSes on any number of VMs, so you can run things like Linux, W2K, or even older variants of Windows and DOS.

Whichever method you choose, you can't lose because both will get you where you want to go. How you get there is more a matter of preference.

Nate

Sean said this, and I think he brings up a good point.

Hopefully I'm not overanswering your question, but I don't think the others addressed one of your questions. I use both Parallels and Bootcamp and they are the same instance of windows. If I install a program in Parallels, it's there when I go
into Bootcamp, etc. To set it up that way you need to install Boot Camp first and then tell Parallels you want to use a Boot Camp partition when you set it up (otherwise it wants to use your OS X partition). I think you should be able to have separate instances of windows if you want to... just don't tell Parallels about the Boot Camp partition (but I haven't tried it).

Sean

I have Windows installed both ways with Parallels. I have a Bootcamp install, and then I have an install of Windows in Parallels. You can run off of either or even both at the same time in Parallels. I now just use the Bootcamp install, and haven't opened the Parallels install in a long time. I like running Windows with Parallels. It acts like it is just another window that is open on you Mac. If you do a Bootcamp install, you only have 1 actuall copy of Windows on your computer. I have 2 copies on mine. One in Bootcamp and one in Parallels, but don't use the one in Parallels any longer, so I will probably delete it.

I recently got Fusion, but I think I like Parallels better. That may be because I am more used to Parallels. I have been using it for about a year, and only got Fusion a month ago. When I switch between Parallels and Fusion, I have to long into Microsoft to update the license (takes about 30 seconds).

I am very happy with Parallels. It lets me do what I need to do without having to have a PC computer. I had some medical CME programs that only ran in Windows. I actually bought a Toishiba PC laptop a year ago just to run those programs. It took the tech over a week before he could come out to my house to set it up. During that week I decided to buy a 15" MacBook Pro and try running the programs from that. I never even took the PC out of the box. The only problem I had was that I got 2 bad Windows XP disks. The instillation would hang part of the way through. I took the first one back to the store and got a new one that did the same thing, only in a different place during the install. By then I was sure it was my computer. For some reason, I made a copy of the Windows XP disk and the install worked fine with the copy. I called Microsoft and they sent me a new disk, and that one worked fine as well. I wasted several hours trying to install Windows because of the bad disks, other than that I had no problems. One thing I learned from my use of Windows is that it is MUCH MUCH easier to do things with the Mac than with Windows.

Frank