Upgrading your parallels image to try out feisty really couldn't be easier. Simply clone the disk image you already have of Edgy and rename it so know what it is. I followed the second set of instructions found at ubuntugeeks.com
First you need to update your /etc/apt/sources.list file to point to the feisty repos: sudo sed s/edgy/feisty/g -i /etc/apt/sources.list
Then run the following commands: sudo apt-get update and sudo apt-get dist-upgrade. This will take a while. to check everything went ok run the following:
sudo apt-get update && sudo apt-get dist-upgrade
sudo apt-get -f install
sudo dpkg --configure -a
When it's done reboot and run the following: cat /etc/issue If all is well you should find the output is: Ubuntu 7.04 \n \l.
Note: The command line route worked without hitch for me but YMMV. As Peter has pointed out the official docs don't recommend this approach. If in doubt use the gui upgrade route.
That said you are upgrading a copy of a VM so if it goes pear-shaped, you can simply create a new clone and start over if necessary.