Here is a more point-by-point run-down of this tactic that I am describing:
Say a lvl 1 Fighter is in melee with a lvl 1 Cleric. The Cleric is well-armored with Plate & Shield, giving him a full AC of 19, but the Fighter has a decent Strength (+1), giving him a total Attack Bonus of +3, meaning he'll hit the Cleric on a 16 or better.
Round 1)
The Cleric wins initiative, and chooses to go on hold.
The Fighter attacks, and rolls a 14 for a total of 17; a hit!
The Cleric instantly chooses Parry, raises AC to 21 (Fighter will only hit on a 18).
Round 2)
The Fighter wins initiative and attacks! This time he only rolls an 11, for a total of 14; a miss.
The Cleric, knowing the Fighter already attacked, now attacks without fear of reprisal.
Round 3)
The Fighter wins initiative again, and attacks with a roll of 17, for a total of 20; a hit!
Cleric just chooses Parry, again nullifies attack.
Round 4)
Cleric wins initiative, goes on hold.
Fighter attacks, rolls a 4; definite miss.
Cleric attacks without fear of reprisal.
Round 5)
Cleric wins initiative, goes on hold.
Fighter attacks, but this time gets a 19, for a total of 22! Even with the Parry, that will still be a hit.
Cleric, knowing that Parry wont do anything, doesn't bother doing it and just takes the hit.
Cleric attacks, as normal.
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Really, the only downside to the Cleric above is that he is forced to go second, which is only a bad case for him if the Fighter manages to roll extremely well (and that would only make a difference if the Cleric managed to put the Fighter down on the same round before he made the great roll). Now, I think there is one thing the Fighter could do to screw with the Cleric: also go on hold, and I think by the rules it would force to the Cleric to choose Parry or attack at the same time as the Fighter attacks, meaning he can't wait for Fighter's attack roll first to decide.