So you want to get your Linux physical machine running inside a virtual machine under Parallels Desktop for Mac? The straight forward way would be to use Parallels Transporter Agent on the Linux machine, however for me under Ubuntu 10.04.1 x64 it caused the machine to forever hang at the "Gathering information" screen... And if you kill the agent then Ubuntu hangs and refuses to restart. I clearly needed a different tactic.
What I did to get my Ubuntu Linux 10.04.1 x64 running happily inside my new Parallels Desktop for Mac 6.0, was the following:
On the source Linux machine, as root dump the whole hard disk (not a partition - the WHOLE disk)
dd if=/dev/sda of=/mnt/backup/192.168.0.1.hdd bs=65536
Obviously substitute /dev/sda for your primary hard drive you want to copy, and /mnt/backup/192.168.0.1.hdd for the destination file to be created. There needs to be sufficient free disk space on that target mount point to contain the source hard disk's capacity.
You could be done, but in my case my Linux physical machine used a 1TB HDD, and I do NOT have room for a 1TB VM, and my actual data only consumed about 250GB. My Linux machine dual booted with Windows 7. So here is what I did: