1. Read the help file that came with it
2. Create a New VM and name it whatever you want.
3. Make sure that the CD/DVD option thingy is set to your actual CD/DVD drive
4. Insert the CD and start parallels up i.e click the green play button.
5. It will boot from the CD and then just continue on with installation
6. After installing XP (I assume its XP you're installing) then install the parallels tools
7. Enjoy windows on a Mac