You can use the patchme command in CrossOver Games. Wait for ProjectEQ's website to go back up.
I really wouldn't strain yourself to use Parallels. I had to do some work to get it to run for me (including modifying the client) so unless you are interested in that kind of development, I'd let it go. But to answer your questions: Yes, you do need a real copy of Windows XP, and yes, you do need a licensed version of Parallels.
EQ of any flavor will run in -->BOOT CAMP<--. Use it.
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