Whenever I try to boot my guest OS (Win XP) I get a Parallels Desktop message that says something like "You only have 126 MB of disk space. Windows needs 130 MB to run. Please delete unneccessary files and click OK when you have cleared enough disk space." I can't then get into the Guest OS in order to do what it tells me. I have tried booting from a virtual CD (gparted, because I have it handy), but I still get the message even though I'm not booting from the hard drive or trying to run windows. If I click "OK" continually, the machine slowly, incrementally runs through the boot process. After 30 minutes of clicking I still hadn't advanced far enough to do anything. Someone please help.
Have you tried parallels compressor, 1. open Parallels to the guest setup screen 2. on Mac menu bar at top, click on VM 3. click on compressor this might get you the space needed
To anwer my own question, the problem was not space on the virtual hard drive, it was space on the physical hard drive (Mac). Doh!