The saga continues..
I received a reply that I needed to contact a THIRD company "Nova Development"(http://www.novadevelopment.com/support/customer_service/index.html)to resolve my activation problem. They provided a phone number and a link. I opt'd for the phone call to try to wrap this thing up.

The call to the number they provided directed me to an automated menu. When I selected the "Parallels 5.0 Desktop" option they provided me with a second phone number that I needed to call.

I call the second phone number. "Your call is important to us. Please hold..". After 5-10 minutes on hold, I finally speak to a human (Blaine) who actually does a nice job of collecting my information and providing me with a new key that did in fact unlock Parallels. Bloody hell! Had I known that using Parallels was actually going cost me over $200 (in lost time), other options might have seemed more attractive.

To add further insult to injury, upon unlocking Parallels, it has basically taken over my mac. Windows is running but at < 5% speeds and the app is not yeilding to other applications running on the mac. Just trying to shut down the other apps after the fact, is taking me 10s of minutes. I don't think Parallels is done with me yet..

Just a warning for any Mac users out there that are considering buying or upgrading the program Parallels which allows you to run Windows on your Mac: you MAY not be able to activate and use your software even though you have paid for it.

I bought Parallels in 2006 and installed and activated it with no problem on my new Intel based Mac. I stopped using it fairly quickly because I was getting tempo fluctuations playing back MIDI files (to their credit, Parallels DID detect and operate the USB MIDI interface with no problem). Because of the fluctuations, I couldn't use Paralles so my $90 was pretty much wasted. I eventually used Boot Camp which worked perfectly but this post is about my experience trying to install a Parallels upgrade for OSX 10.3.

I paid for the upgrade and installed the new version of the app on my Mac. The new activation key was accepted but when it asked for the key from my previous installation, the key was rejected. I initially contacted Element5 where I bought the upgrade but they directed me to the Parallels home page/support. (Note - the user log in for Element5 is different from the Parallels site).

The Parallels support people said that my name and email address was not associated with the original key I provided. I forwarded them the email notification I got with the original activation code which included an order number, my correct name and email address (proof that "I" paid for the original product) but they claim the product was registered with a totally different name and address.  

When I bought the computer back in 2006, it was an "open box" special that a customer had taken home and returned immediately. I initially tried to use the computer without reinstalling the os but eventually had to in order to get my identity correct for the computer. I suspect that I activated Parallels before I reinstalled the OS and which resulted in the wrong user name and email being associated with the key activation.

I relayed the "open box" story to Parallels support and am waiting to heard back. Since I provided proof of purchase and obviously could not use the software if it was activated by someone else on another computer, I don't understand Parallel's hesitation to just resolve the issue.

At this point I'm definitely pissed off. I'm a software contractor who works hourly. Based on my hourly rate, this "upgrade" has already cost me 2 or 3 times the value of the FULL product in wasted time (at least 5 emails so far). My latest email to them described my possible user name screw up based on the computer's original owner and I'm waiting to hear back but I'm not happy.  I don't especially want to go look for another "Windows on my Mac" solution but I was not happy with my original Parallels experience (the aformentioned tempo fluctuations) and the company's treatment of paying customers (yes, I've sent them money. Twice!) has left a very bad taste in my mouth. Buyers of Parallels for Mac beware.