Hi Michael, I followed your guide this weekend, it is wonderful and I would like to add a few things:
First of all: the alternate step 1 that was recently posted does not seem to be a possibility through Mountain Lion (OS 10.8.2, SuperDrive, Early 2011 MBP). Specifically, Disk Utility provides no option to create a .sparseimage from the Snow Leopard disk. I attempted to use a sparse image created with DMGConverter (third party program). This failed to keep the image as a bootable drive.
The workaround I found to this was to install Snow Leopard as a partition on an older MBP (one without a previous bootcamp partition, it seems to be trickier to add partitions on a bootcamped drive), follow the entirety of step 1 in that Snow Leopard partition, transfer the .cdr to an external drive, then onto Mountain Lion. Once I had the altered .cdr, I was able to follow all of your steps and successfully create a virtual Snow Leopard. I did all of these steps on an early 2011 MBP running OS 10.8.2 with Parallels Build 8.0.18314 (not the most up-to-date parallels, I did update to the current build [different computer, don't have build number] and the .pvm still works). I copied this .pvm to an external drive and moved it over to an rMBP (same OS/build) and Snow Leopard is working on both machines.
For people trying to migrate Eudora (and possibly other files) from an old rosetta machine, read this:
My main goal with installing SL was to run Eudora (a mail client) in parallels by transferring my old Eudora mailboxes to my Mountain Lion machine from my Tiger (10.4.11) Machine via an external drive, keep the data on Mountain Lion and have Eudora read that data. All of my initial attempts to have Eudora correctly recognize my old files failed, these included reading files from my Mountain Lion machine (through Shared Folders [the network drive created by parallels]), from my external drive (through Shared Folders), and from my Tiger machine itself (through my home network). What I've concluded from all of these is that Parallels seems to lose metadata and resource information when reading from network drives.
Now, this probably isn't a problem for every application, but Eudora uses two mailbox systems, one is .mbox (decently common, one could resave the file as .mbox losing only minimal information). This other is a mixture of .mbx and .toc (Eudora's own mailbox and Table of Contents file types). One cannot simply resave a file as .mbx and .toc without expecting to lose some information (in fact, I found that with TextWrangler, I was able to resave some files as FILENAME.mbx and FILENAME.mbx.toc, Eudora could read these, but then would convert the mailbox into .mbox and remove the .toc, this solution didn't actually restore the files anyway).
If you don't read any other part of my post, this is what you need to know: If you want to transfer data from an older machine to parallels snow leopard, mount the disk that your data is on directly to snow leopard. To do this:
1. Unmount any drive you have previously mounted on your host
2. Remove that drive physically (pull out the USB connection).
3. Make sure your Virtual Machine is running
4. Re-insert the drive
5. Parallels 8 (probably 7 as well) will give you a graphical prompt asking where to mount the drive, choose the virtual machine.
6. Transfer data over.
Now, let's say that you want to keep your data on your host system (Mountain Lion in my case). This way, you have direct access to your files from your host while still allowing Eudora to read the data from the host, but as I said before, Eudora couldn't initially read data through Shared Folders. The steps to do this are:
7. Transfer the data (from step 6) to your host system through Shared Folders. This is the only time I would recommend using Shared Folders for data transferring without expecting to lose metadata/etc.
8. (Specifically Eudora) make an alias to your Eudora folder and place it on your guest where Eudora would expect its files to be (~/Documents/).
Doing this will allow you to keep your .pvm at ~14gb without having to constantly make new backups of it. It also means that you will have access to all your data on both host and guest.
Again, thank you so much for the guide Michael.