Parallels runs two OS's at the same time, Bootcamp is a single boot. Parallels is very processor intensive when you have a handful of applicaitons on the go. I have a 1GB, 2.14Gz iMac and she struggles when pushed while running Parallels.

I'm running XP under Bootcamp on my 512mb,1.83Gz Macbook right at this moment and she is twice as responsive as what the iMac would be under Parallels.

There is an application for Mac called Crossover which can run 'some' windows apps under OS X. I blogged about running uTorrent (Windows only App) on Mac OS X under Crossover recently. It's a handy alternative to running Parallels or booting into XP/Vista if you need to run a single/small Windows only application.