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There's also the Bootcamp option: just boot straight in to Windows instead of using a VM. With Parallels you can actually do both- run your Bootcamp partition as a VM from within OS X, or skip Parallels and boot directly into that partition.
I own Parallels but rarely use it- I just boot into Windows instead, so I can't answer your question about whether it can use dynamic RAM. I know that by default it wants to allocate a fixed amount (e.g. 1 or 2 GB) to the VM.
If it's just Outlook and Office you're after, you could just get those for Mac (it's an option anyway).
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64 GB iPad 2 WiFi, Apple TV 2, 32 GB iPhone 4
Early 2011 MacBook Pro 13" (dual boot with Windows 7), Early 2009 Mac Mini
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