I develop lots of websites on a virtual server on my Mac. I have a hosts file configured to interpret lots of different domains locally, e.g.,

127.0.0.1 mydomain.local
127.0.0.1 my-other-domain.local
etc.,
etc.,

I wanted IE within Parralels to also interpret these, but it does not recoginize localhost, or 127.0.0.1 the same.

But thanks to a few suggestions here, I figured it out.

Credit to this thread: www.macosxhints.com/article.php?story=20070112081823250

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The following instructions are for using Parralels on Mac OS X Leopard.

Microsoft makes copies of Windows 6, 7, and 8 available for free download, that are “time-bombed,” so that they can only be used for about a month. These are perfect for browser testing.

Download whichever ones you want, here: www.microsoft.com/downloads/details.aspx?FamilyId=21EABB90-958F-4B64-B5F1-73D0A413C8EF&displaylang=en

But only download the .exe versions.

From within the virtual instance, install Bonjour for Windows (support.apple.com/downloads/Bonjour_for_Windows).

To quote the other nice person,

“Go to System Preferences on your Mac and click the Sharing icon, then switch to the Services tab. You will see a message saying, “Other computers on your local subnet can access your computer at …” followed by a name ending with “.local”.

In other words, find out what your computer is called on the network. Let’s say it was mymac.local

Then, I found out what IP address the virtual Windows thinks mymac.local resolves to. It gave me some other IP address.

Then, I took all of the lines in my hosts file on my Mac, and copied them into a new file, and did a search and replace on the normal localhost IP of 127.0.0.1, with that new IP.

Then, I opened up C:\WINDOWS\system32\drivers\etc\hosts, and added those lines to it.

It works. Yay!