I have both installed on my iMac 20 with 2GB RAM.
For Parallels, I assigned 512MB of memory and the performance is very good. I run MSN Messenger, Office, IE (to check website compatibility), Bitcomet, a few work related programs and Windows Media Player (for DRM materials). The Internet connection runs at full speed. Sound is very good. Video is watchable. Make sure you install the Parallels tools after you install XP. It includes the invaluable mouse and video driver that make the experience much more enjoyable. The only downside I can think of, apart from the obvious limitations of a virtualized solution, is the lack of USB and Firewire capability. The developers at parallels had said that this would be a must have feature in the final release. So I am not really worried about it. Overall, fantastic quality for a product still in beta stage. I can't wait for the final version to come along. It raises my productivity to a whole new level.
I am actually typing this on XP through Boot Camp. I am downloading Day of Defeat on Steam.
Boot Camp will be used for gaming exclusively on my machine. Everything else is fast enough for me in Parallels. There is still some driver issue with under XP. My wireless would drop profusely from time to time. But at least the system seems solid. Make sure you disable the USB Camera in Control Panel -> Systyem -> Hardwares or your MSN Messenger will most likey blue screen you.
Having to restart to use Windows can be annoying especially when you are working. That's why I use parallels to do everything other than gaming. Even Copy+Paste works two ways between the guest and host OS.