It does a complete image of the drive and then launches the image in Parallels. Same desktop, all the files etc.

I didn't cull anything - I wanted my machine complete as is. I went into the VM and uninstalled a bunch of the Toshiba specific drivers etc that I don't need in the VM.

EDIT: I can run Coherence in Parallels so the apps etc just run on the iMac desktop without a Windows Desktop.