HOWTO: Reducing virtual disks nominal size manually 

http://www.vmware.com/community/thread.jspa?threadID=47672

a much simpler way IMO is to

  1. Dump an image of your VM to DVD or another file by using acronis, ghost, selfimage or whatever. Provided you have networking enabled you can dump your image to a network file from within the VM itself if you want to — although on restore you'll need a bootable recovery disk and network access.
  2. Delete the VM from disk.
  3. Define a new VM with the disk size you want
  4. power on a VM with a copy of PARTED / Partition Manager/ a BartPE disk
  5. create your partition with the actual disk size you want the VM to "See".
  6. restore your VM using whatever software you used to dump the image with.

documented on: Jul 11, 2006 by jimbo45