I think Parallels uses Apple's Boot Camp driver, which they can't distribute. You need to search the web for a copy.
Totally right . In the end here's how i did it.
Go to
Utilities - Boot Camp Assistant . Right click to "Show Package Content"
Then in the folders -
Content -
Resources , there is DiskImage.dmg . Mount this and you will have a file called "Install Macintosh Drivers for Windows.exe" . Copy that to your Parallels shared drive and run it . You'll end up with it uncompressing all the drivers to
C:\Program Files\Macintosh Drivers for Windows XP 1.1.2 . In here you will have
C:\Program Files\Macintosh Drivers for Windows XP 1.1.2\iSight and you can do the manual driver location in the windows device install.
I'm going to throw up a how to guide somewhere on the web as i got sick and tired searching the web and coming up against a brick wall or being told the only solution was Mercury Messenger ..
Will post the link shortly.