While in my case I didn't find corruption in there, this file does hold the key to successfully launching and running your VM within Parallels.
One small change renders your VM useless.
Many users have attempted (and some successfully) to re-create the corrupted image though Parallels never lays out exactly what everything means and it's importance to your VM, it does contain the references to your snapshot images, which is the parent of which, etc.
If your VM won't boot up, try looking at your DiskDescriptor.xml file (open your .pvs file, then open the .hdd file using right-click 'Show Package Contents')
Here's a sample:
<Parallels_disk_image Version="1.0" >
<Disk_Parameters>
<Disk_size>134218224Disk_size>
<Cylinders>133153Cylinders>
<Heads>16Heads>
<Sectors>63Sectors>
<Padding>0Padding>
<Miscellaneous>
<CompatLevel>level2CompatLevel>
<Bootable>1Bootable>
<GuestToolsVersion>5.0.9344GuestToolsVersion>
Miscellaneous>
Disk_Parameters>
<StorageData>
<Storage>
<Start>0Start>
<End>134218224End>
<Blocksize>504Blocksize>
<Image>
<GUID>{5fbaabe3-6958-40ff-92a7-860e329aab41}GUID>
<Type>CompressedType>
<Flags/>
<File>Windows 7-0.hdd.0.{5fbaabe3-6958-40ff-92a7-860e329aab41}.hdsFile>
Image>
Storage>
StorageData>
<Snapshots>
<Shot>
<GUID>{5fbaabe3-6958-40ff-92a7-860e329aab41}GUID>
<ParentGUID>{00000000-0000-0000-0000-000000000000}ParentGUID>
Shot>
Snapshots>
Parallels_disk_image>
If you have more than one snapshot, you'll find additional entries as well as additional entries.