john@tokbox's dashboard

The following is from http://kb.parallels.com/en/5028 and worked for my MacBook Pro. It took me far longer to find this article than it should so I thought I'd share it here as well. I claim no credit other than the ability to copy and paste.

iSight Camera Driver Installation

RESOLUTION
1. Insert the original Leopard DVD into the DVD drive of the Mac. Connect the disk to the virtual machine by choosing the "Default CD/DVD" drive under the "Devices - DVD rom" menu.

2. Hold down the Shift key in order to disable the autorun option and stop the Boot Camp drivers automatic installation. If the Boot Camp window appears click on the "Cancel" button to cancel this installation.

3. Open MyComputer, right-click on the Boot Camp DVD disk, choose the "Open" option, browse to the "Drivers-Apple" folder and find the "AppleiSightInstaller.exe" file.

4. Connect the iSight camera to the virtual machine. To do so please choose the iSight camera under the "Parallels - Devices - USB" menu.

5. Double-click on the AppleiSightInstaller.exe to install the required drivers for iSight. Please follow the on-screen instructions.

[ed. I'd add that in step 5, for me, nothing seemed to happen. I wasn't prompted, nothing opened, etc. It appeared that double-clicking the file did absolutely nothing. However, it did work, the drivers were installed.]