Open Boot Camp Assistant in your Utilities folder and click on the large Print Documentation button. Read it carefully.
You can find out about Parallels at their website.
Windows on Intel Macs
There are presently several alternatives for running Windows on Intel Macs.
1. Install the Apple Boot Camp software. Purchase Windows XP w/Service Pak2, Vista, or Windows 7. Follow instructions in the Boot Camp documentation on installation of Boot Camp, creating Driver CD, and installing Windows. Boot Camp enables you to boot the computer into OS X or Windows.
2. Parallels Desktop for Mac and Windows XP, Vista Business, Vista Ultimate, or Windows 7. Parallels is software virtualization that enables running Windows concurrently with OS X.
3. VM Fusionand Windows XP, Vista Business, Vista Ultimate, or Windows 7. VM Fusion is software virtualization that enables running Windows concurrently with OS X.
4. CrossOver which enables running many Windows applications without having to install Windows. The Windows applications can run concurrently with OS X.
5. VirtualBox is a new Open Source freeware virtual machine such as VM Fusion and Parallels that was developed by Solaris. It is not as fully developed for the Mac as Parallels and VM Fusion.
Note that Parallels and VM Fusion can also run other operating systems such as Linux, Unix, OS/2, Solaris, etc. There are performance differences between dual-boot systems and virtualization. The latter tend to be a little slower (not much) and do not provide the video performance of the dual-boot system. See MacTech.com's Virtualization Benchmarking for comparisons of Boot Camp, Parallels, and VM Fusion. Boot Camp is only available with Leopard or Snow Leopard. Except for Crossover and a couple of similar alternatives like DarWine you must have a valid installer disc for Windows.
You must also have an internal optical drive for installing Windows. Windows cannot be installed from an external optical drive.
I have Windows 7 set up in a Parallels virtual machine running on a Mid 2011 MacBook Air. I also have Windows 7 installed on a 100GB Bootcamp partition. I recently installed Star Wars - The Old Republic (SWTOR) seperately on both the virtual machine and on the Bootcamp partition. The Bootcamp install runs substantially better (higher frame rate with less artifacts or control issues) than the virtual machine installation. The best way to describ
I believe this is because Windows talks directly to the video processor (via Apple supplied drivers and DirectX) whereas Parallels has to do a bit of interpretive work to adapt DirectX to accomplish the same objectives. The above is a "gaming specific" observation. With respect to other non-graphic intensive applications, performance subjectively "appears" to be about the same.
My graphics card is different than yours (Intel HD 3000 with 384 MB of VRAM). If you are running a later model iMac you'll be on the AMD graphics chip with either 512 or 1024 MB of VRAM. You'll like have a better graphics intensive experience in Parallels than I.
I have not tried to run any benchmarking apps to produce metrics but would be happy to give it a try if interested.
Any OS running as a Guest VM will not run hardware intense operations well, it has to share processor cores, RAM and graphics, and does not have direct access to the hardware. No mystery.
When you install - and some things should be installed natively - they are going to be available to the VM.
If you have 4-cores (not two dual core with HT) and 8GB RAM... that alleviates the VM quite a bit but not for 3D (games).