Logo Parody - Legal or Illegal?

I can already see the potential behind this thread to stir up a posting storm. Here is my issue:

I get A LOT of requests from skateboard/bmx clients to create logos that parody other logos, mostly beer companies. This is probably a pretty broad question, but, what are the legal issues surrounding that? For example, I have a client now that wants me to create a logo that says “Urban - King of Skate Shops”, which would parody the “Budweiser - King of Beers” logo.

We all know how good Photoshop can be in duplicating things in exacting detail, which is what the clients usually want. Are there any loopholes I can use?