I've installed various versions of Feisty Dawn in Fusion ...
7.0.4 normal i386 both from install ISO and as a vm, 6.0.6, Ultimate ready built vm appliance, Ultimate 1.4 from ISO install and as an appliance, and Ubuntu Studio from ISO - on different Macs; MacBook, MacBook, Mac mini, and Mac Pro.
And all work as they should and get properly full screen in it.
Has Parallels support answered to your questions?