In the magic resistance rules, it says a magical rock is resisted by parma.
IF a wizard enchants a sword as a magic item and then swings the sword to wound the target, does it have to penetrate magic resistance to wound the target since it is magical sword? What would the penetration be in this case? (we are not taking about the magical effects in the sword).
(really?) 
Okay...
There are enchantments, and there are enchantments.
Imo... (and every response to this question is going to be "opinion")...
A mundane sword with an enchantment merely attached is not the same as a "magical sword".
It comes down to a question of whether the sword, itself, is magical, or whether there is simply some magical effect coming along for the ride. The sword hits as a sword, but any "magic" needs to penetrate to make a diff.
So, if the sword has a "do more damage" effect (flaming, PeCo, whatever) added to what otherwise remains a regular sword, but it's otherwise wielded mundanely, then if there is no penetration, the sword does "regular sword" damage, and the extra enchantment is not addded.
However, f the sword itself has been magically altered (MuTe sharpness) or was magically created, then the sword itself is "magical" - and it's an "all or nothing" situation for penetration.
Compare those two different situation, and consider a magically created sword that then later was made flaming - two magical effects, each of which need to penetrate, and that penetration is decided separately and independently - maybe one, maybe the other, maybe both, maybe neither. With a mundane sword and a magical fire attached to it, the mundane object has no need to penetrate.
If the sword was Rego'd at the target - a "dancing sword" effect - then if the magic does not penetrate, there is no force/motion behind the sword - zero damage. This is a more delicate case, but while the sword itself remains mundane, the motion (and hence thrust/cut) of the sword is magical, and that is what is being resisted.
So, if a pink dot were placed on a sword, and it did not penetrate, then the mage would not suffer the effect of the pink dot, but ~would~ suffer the effects of the otherwise mundane sword striking them.
If a desperate defending mage used MuTe to change an enemy's sword to be magically sharper (perhaps the only spell they could cast), then the now-magically altered sword either penetrates and does more damage, or doesn't at all. (If he MuTe'd it to become duller, then if it did not penetrate, zero damage, and if it did, then less, due to the magically altered sword!)
If that same defending mage enchanted the same sword with a flame aura, he would at least take damage from the sword - since that was not changed, only "added to" (identical to the pink dot situation.)
For me, this is 1) (mostly*) consistent, B) acceptable and balanced, and iii) (usually*) easy and obvious to apply. My preferred choice.
(* I can give examples where this model fails utterly, but imo those are rarer than the flaws with other models. I have found no perfectly acceptable paradigm.)
As a house rule, which we think works well is as follows
If a sword is enchanted such as with the pink dot or made sharp, then the weapon gets through parma (being non-magical) but the effect does not so the sharpness or flame does not.
The exception to this rule is if the thing is fundamentally and intrinsically changed by the magic so an iron bar changed into a sword or a battering ram turned into an arrow.
This means that parma would not stop a virulent blade getting through but the fire wouldn't follow through, however if a person fired an arrow which used to be a battering ram this whole arrow would bounce as opposed to transforming into a battering ram mid flight and taking said suprised magi off his feet.
This is a compromised between Pink-dot parma and bow-launched battering rams.
A
The pink dot/ magical sharp theory does not work for me. Looking at the Param examples on ArM5 pg 85. A normal rock with a spell on it bounces from Param. So a normal Sword with a spell on it bounces.
Talk me down...
No.
Normal rock => large boulder bounce.
It's exactly fine with this system: its like a muto'ed sword.
I like this system CH said.
Okay...
You are 100% according to the Rules As Written.
But the RAW doesn't really work. If you leave the Pink Dot Loophole open, it just begs for trouble. The two armies are marching down on our covenant...
CrIm, Target-Group, put pink dots all over their weapons and bodies. They can no longer enter the aegis or touch a magus. You make Creo Imaginem the ultimate defence against anything
CH has sound reasoning on this one. Flaming sword, flames stay outside but the sword continues on. The Target is the Flames created, not the sword. Same with the Pink Dot, target is the dot, not the sword.
CH gave a reasonable system.
The reason I asked was I was working on a character with a sword.
She opened the sword for enchantment, then spent season to make it a talisman. It is now considered a magic item effectively.
If she swings it to hit someone, does parma block the magic item and if so, what would the penetration score be?
I am also thinking of enchanting it with a few effects:
What would impact on parma be now?
How is a rock with a spell on it, that is being used as a weapon different than a sword with a spell on it?
it is a defense against anything with magic resistance. Not a defense against anything.
You misunderstand. I have magic resistance. I need to penetrate my own parma for my own spells to affect me. I cast spells on their swords, those spells need to penetrate my parma, and I am using forcless casting 
Better yet, Roberto and Havlard stand side by side. I'll cast pink dots on the swords of your enemies, you put dots on the swords of mine. Those swords are now magical, according to RAW they cannot touch us unless those spells penetrate our parma magicae.
I mean, you are indeed correct according to what the rules say. I am saying that the rules have a known loophole that has existed for years and people simply overlook it because it is silly. You can play either way just fine as long as you impose a "no silliness" rule.
We have reached a gentlemen's agreement not to exploit the pink-dot-loophole in our saga. This works just fine as players do not want to fall victim to someone else using the pink dot.
That is usually the best way to go about it 
I did not misunderstand at all.
So it is fine that it becomes a magical defense against mundanes. If you are aware of an attack with enough time to cast a spell on the weapon/person. The game is about magic. Magic should be very powerful. Any SG worth their salt will teach the players they are not invincible with this "loophole".
Leave it in because it has such limited use in reality.
YEah, my question is magic items with a touch based trigger? You can't touch opponent to trigger effect if MR blocks the item from getting in contact (the effect that is triggered is something else, that is something that should hit Magic resistance).
That's all well and good, but at some point someone wants to do something that is not abusive, but so close to this same effect that people have to scratch their heads.
For me, for many, such arbitrary "Pay no attention to the Mage behind the Curtain!" rulings are just weak. They deal with the issue by pretending it's not there, by agreeing simply never to go there.
Not that my suggested solution is perfect - but it's something that players understand and can work with, or around, as creativity and the need (or just the mood) strikes.
Two options.
One is to rule that as soon as any mundane item is made into an enchanted device (significantly diff than an item with an enchantment placed upon it!), it itself becomes a magical item.
The other is that the device, unactivated, can touch, but as the effect "turns on" that is stopped by the Parma. Parma doesn't have to have a thickness - it's abstract, it's... magical.
If there are no active effects going, the talisman sword is not blocked. If the effect is triggered by touch, then that effect and the sword are indeed blocked.