First of all, you can still start terminal using Ctrl+Alt+T.
I followed some of these forum links and one reported issue had to do with a missing "libGL.so.1". See http://forum.parallels.com/showthread.php?t=260418
Confirmed that this was the issue by running "unity --reset". This made unit work even worse but showed a proper error message involving libGL.so.1.
A solution from one of the forum posts worked for me:
sudo ln -s /usr/lib/parallels-tools/tools/prltools.x64/xorg.7.1/usr/lib/libGL.so.1.0.0 /usr/lib/x86_64-linux-gnu/mesa/libGL.so.1
Apparently the error was caused by an upgrade of Parallels tools failing to install properly. The lack of interest from Parallels in the forums makes me worried about the future of their linux support.