I found out that Parallels 3.0 doesn't work with Snow Leopard when I tried running it today. This is highly annoying because version 4.0 costs $50 to upgrade. If you don't upgrade, your virtual machines will be inaccessible under Snow Leopard.
Parallels will not support version 3.0 under Snow Leopard in the future according to their website.
So I'm stuck with the forced upgrade. I wonder how many other customers feel annoyed at being forced to spend $50. Not cool Parallels and not appreciated. VMWare Fusion works fine on Snow Leopard. I'll be moving my machine to that as soon as I can.