Compacting a dynamic sized Virtual PC 2004 Hard Disk
This is really old news, but I’m going to post things that I get asked all the time, mainly so I don’t have to load my email archive.
One of the new features that came in SP1 of Virtual PC is a Virtual Disk Pre-compactor, which is basically a tool that you must run inside the VM before you compact the virtual hard drives.
In the Virtual Machine
Remove all the unwanted stuff from your Virtual Machine (Make sure that the recycle bin is cleared)
Defrag the Hard drive.
Like the VM Additions package the Pre-compactor is an ISO image that you mount to access the program. This is located (by default) in C:\Program Files\Microsoft Virtual PC\Virtual Machine Additions\Virtual Disk Precompactor.iso. Run the application. This 'zeros' out the unneeded space.
exit your VM
In the VM Console
Run the Virtual Disk Wizard
Choose Edit existing virtual disk
Select the virtual disk file
Select compact.