Parallels supports 32-bit only as yet. It should do 64-bit. This allows installation of huge RAM like say 16-32 GB, and would allow you to consolidate multiple desktops on one physical and beefy machine.

Is there any way we could allocate say 1-2 GB for a 32 bit OS while running on 64 bit Athlon/Opteron processor with 16 GB RAM?

This is so because most applications are still a long ways off from being compiled/tested for a 64-bit world.

Thanks

Parallels seems to be VERY similar to twoOStwo and SVISTA.

I just tested Parallels with a MS Windows NT 4.0 disk I created with twoOStwo.
I had used this disk with SVISTA too.
The VM tools from SVISTA were still in it and the drivers from it worked fine with Parallels. Here is a screenshot:
http://haar.student.utwente.nl/~julius/screenshots/parallels_with_svista-vmtools.png

For some reason, the CD-ROM drive doesn't work in this VM though, so I'm even unable to install the newer VM tools.

Anyway, it's good to see that this VM is still being developed.