Advantages

You Don't loose any data just your preferences, and will allow you to backup. useful for data retrieval. In the case if Windows 7, Vista, XP, 2000 and NT will leave your old operating system in place so that data can be retrieved and/or your original operating system repaired.

Disadvantages

Can fail if a hardware fault was the original cause of the problem.

Requires a secondary hard drive or partition for Windows 7 and Vista.

Secondary hard drive or partition also recommended for all operating system due to the really real risk of data loss.

How to do it

You start the windows installation and instead of installing into the default directory of Windows (or WinNT) you select a different directory or drive C:\Windows001 (or C:\WINNT2).

Vista can only be parallel installed onto another partition that has no operating system.

Windows 7 also requires another drive or partition to parallel install

 

Extra Notes

Windows 7, Vista, NT, 2000 and XP users have a distinct possibility of loosing all their personal data if they set the login name the same as the previous install.

Windows 7, Vista cannot be parallel installed onto the same partition as any other operating system.