If you’re using Parallels virtualization tools to host an OS X virtual machine, you could find you cannot compress the virtual hard disk to reclaim unused space. We ran across the issue a few weeks ago and were rather surprised, because Parallels has a “Compress” feature that is supposed to do exactly that with your virtual hard disks.

Late last year Parallels knowledge base confirmed there is a problem affecting version 5, 6 & 7 of Parallels Desktop, but it doesn’t advise you on how to solve the problem.

We found we could workaround the problem like this:

First, boot the VM that needs compressing and run the OS X “Disk Utility”. Using this tool, select the Virtual HDD and press the “Partition” button. You should be able to reduce the size of the partition from its maximum to something closer to the amount of data that is actually being used by the partition. Press “Apply” to commit your changes and sit back and wait for the operation to complete.

Next, create an empty Windows VM and configure it to boot an ISO image of the open-source Gparted partition editing software. Before booting the VM configure its first hard disk to use your source virtual hard disk file – the one that needs compressing. Next, again before booting the VM, add a second virtual hard disk and configure it as a new, empty, virtual “Expanding” hard disk file.

Now boot the XP VM and use Gparted to copy the partition from the first virtual HDD to the second. When the copying is complete shutdown the XP virtual machine. The last step is to create a new OS X VM and assign the freshly copied virtual HDD as its only hard disk. Your new VM will be shrunk to the size of the new virtual partition.