Parallels has announced a free update to its Parallels Desktop for Mac software, offering up Mac OS X 10.5 Leopard and Vista support along with a range of improvements previously available only in the beta version of the software.

The update also includes Parallels Transporter, which helps users of existing systems migrate existing settings — including applications, files and profiles — to virtual machines. Support for USB 2.0 devices (rather than just v1.1) and support for multiple Boot Camp partitions also feature in this release.

Transporter instantly converts VMware Workstation and Microsoft Virtual PC images to Parallels-ready images. Users can also run their entire Boot Camp installation, directly in a Parallels virtual machine.

This version also features Coherence, which runs Windows applications on the Mac like they are native applications. 

In Coherence mode, the Windows desktop disappears, leaving Windows applications, such as Outlook and Internet Explorer, running directly on the Mac desktop and from the Mac application dock.
“When we introduced Parallels Desktop in April, we blurred the lines between the Mac and Windows worlds. With the introduction of Coherence, we completely blow that line away,” said Benjamin Rudolph, director of communications, Parallels. “We intend to expand the function to help computer users move to a truly operating-system-agnostic desktop.”

iSight cameras built in to MacBooks, MacBook Pros and iMacs are also fully supported in virtual machines and users can also burn CDs and DVDs directly in virtual machines, and play copy-protected CDs or DVDs just as if they were on a real PC.
Additional features include file sharing between Windows and Mac OS X by drag-and-drop and more.

A complete list of features and improvements found in Parallels Desktop for Mac is available here.