Parallels lets you run an operating system on top of your operating system. But based on Apple's docs, it won't support emulating Intel CPUs well enough to run an x86 virtual machine, it will only run operating systems which run on ARM.
And that’s the big thing a lot aren’t understanding.
Having said that, performance is not the same.
On the other hand, there are builds of Linux that are ARM. Windows also has ARM builds[1] and they also have a translation layer to run x86 applications[2]. This is done in software, so there’s a performance hit[3].
[1]: https://docs.microsoft.com/en-us/windows/arm/
[2]: https://docs.microsoft.com/en-us/windows/uwp/porting/apps-on...
[3]: https://www.techspot.com/review/1599-windows-on-arm-performa... (Other parts are good if you’re looking to get an overview of how it works and limitations).
This is for virtualizing an entire environment/OS like Linux (ARM only likely), it has nothing to do with Mac apps. There's also not enough information provided about if it can emulate any x86 but chances are, it won't be able to do that.
You can find out more about Rosetta here: https://developer.apple.com/documentation/apple_silicon/abou...
It's probably not, but we'll have to wait and see.