I faced this situation as a lawyer, and thought it was silly to go after a parody site, but I did want to have a bit of cover because the parody was also selling merchandise related to our mark. The parodist invited a cease-and-desist letter - instead I sent a "proceed-and-permitted" letter. Here's a good summary:
http://www.convergenceculture.org/weblog/2007/01/proceed_and_permitted_second_l.php
I really don't understand why more lawyers don't take this approach. Possibly it's because a sense of humor is required.
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there's another way
I faced this situation as a lawyer, and thought it was silly to go after a parody site, but I did want to have a bit of cover because the parody was also selling merchandise related to our mark. The parodist invited a cease-and-desist letter - instead I sent a "proceed-and-permitted" letter. Here's a good summary: http://www.convergenceculture.org/weblog/2007/01/proceed_and_permitted_second_l.php
I really don't understand why more lawyers don't take this approach. Possibly it's because a sense of humor is required.