In present day power systems, Power Quality (PQ) issues are causing great concern owing to the increased use of power electronic controlled drives and fluctuating and other non-linear loads. This problem is further aggravated by a steady increase in the integration of renewable energy-based Distribution Generation (DG), employing power electronic converters to distribution systems. Custom power devices with suitable control strategies provide an effective solution to these power quality issues. In this work, a typical three-phase distribution system supplying non-linear load and with DG integration is considered. A shunt connected DSTATCOM at PCC of the system is employed to mitigate power quality concerns. Initially, a parallel-VSI based DSTATCOM configuration, employing individual DC-Link and working basically on the principle of current sharing, has been proposed. The analysis is carried out for variable load conditions for PQ enhancement making use of a more effective control theory viz. Instantaneous Real-Reactive Power (IRP) theory for the generation of suitable switching patterns to the individual VSIs of the parallel DSTATCOM. Further, an improvement over the above configuration viz. combined/common DC-Link-fed parallel DSTATCOM is proposed. This configuration has the advantages of minimized sensing elements, reliable operation and low-cost compensation. A similar analysis is carried out for PQ improvement, making use of the same IRP theory with some modifications (known as MIRP theory). The effectiveness of this configuration is established from the simulation results. In all the above cases, the analyses are carried out using MATLAB/Simulink platform and the simulation results are presented in detail. Thus, the proposed parallel VSIs-based DSTATCOM configurations employing suitable control strategies provide effective solutions for power quality issues under varying load conditions in conventional distribution systems.