On the heels of Parallels releasing the upgraded version of its software for running Windows on the Mac, VMware introduced Beta 4 of Fusion software that does the same thing.
Both applications let you run Windows on top of the Mac, either in full-screen mode or hiding the desktop and just showing the application. They both support advanced, 3D graphics to run popular games. They both support cut-and-paste between Windows and the Mac.
Looking at a feature-for-feature comparison, Fusion has one feature Parallels lacks: Ability to launch Windows applications from icons on the Mac desktop. Update 6/12: Both Parallels and Fusion can launch Windows applications from icons on the Mac desktop.
The real question is how performance and stability compare between the two packages. I'll give 'em both a good going-over pretty soon and let you know.
I reviewed Parallels 2 in May; it was extraordinary software, but still had a couple of flaws.