How does the name of a Parallels VM translate to the default name in Terminal.app prompt?
indeed it may have to do with the accent, try it without the accent.
my VM is called "PD XP MBP-Lex.pvm" in the mac and in Terminal and not changed.
Do you have the standard language keyboard?
If not maybe opening the keyboard from the menubar and select the US-International-PC keyboard and use the displayed keyboard layout to make the accent-grave.
Lex