In this post I'll describe the solutions for two issues encountered after upgrading to Parallels Desktop 8 on my Mac 10.7 (with Win XP as the guest OS).
The first problem was that popups and windows (such as the Windows Start menu or task manager) were not always displayed correctly in Coherence. Part or all of the window was blank (white) until something caused it to repaint (see a related thread on Parallels forums):
This was fixed by turning 3D acceleration on (Virtual Machine menu -> Configure... -> Hardware tab -> Video).
The fix was suggested by Parallels' support, who said the glitch was an unintended side-effect of other improvements that went into PD 8 and that unless turning 3D acceleration on causes other problems, this is the fix (i.e. keeping 3D acceleration on will be required).
Keyboard layout / input language not switching
Another problem was with switching input languages in the guest OS. Command+Space (the shortcut I use to switch languages ("input sources") on Mac) could not change the language to English while Parallels was focused.
Turned out this was due to keyboard configuration in the Win XP "Text services and input languages" dialog. I somehow ended up with "United Kingdom (Apple) - Parallels" as the only keyboard for the "English (United States)" language:
The problem disappeared when there was a "US" or a parallels US keyboard in the list of available layouts for the language: