It is possible to free up quite a bit of hard disk space by compacting your virtual disks for VMWare. Here is a easy (manual) way to shrink a Windows guest image hosted on VMWare Fusion for Mac OS. I have used the recipe below to successfully save about 50% of disk space for a Windows 2003 R2 guest image on Mac OS 10.5.2 running VMWare Fusion 1.1.1. Other Windows guest OS’s like Windows 95, 98, NT