Can’t open Parallels after Mountain Lion update

I just upgraded my Mac to Mountain Lion.  So far, I like it.  Especially the integration of Twitter into the OS, and the enhancements to iChat (now called Messages).  However, there was one thing that bothered me, when I tried to open Parallels.

First off, my Parallels dock icon showed it cannot be opened: 

You may also get the error message “You can’t use this version of the application Parallels Desktop.app with this version of OS X.”

 

According to Parallels website, you need to re-install using the latest build of the app.  

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