In Beta 6 I used the Image Tool to expand my VM hdd image. The Paralles Workstation shows the correct expanded size, but Windows XP shows the old, small hard disk size. Ideas?
Windows XP won't see the size right away you can either create another partition through Windows Computer Management or get a program like Partition Magic to resize your primary partition.
What I did was to download a free Linux rescue disk that has a full suite of tools, including a partition magic clone. Google this file: "systemrescuecd-x86-0.2.18.iso" and download it. I then attached the .iso image to the Parallels virtual pc CD Rom drive and changed the boot order to CdRom first. Be sure to select " connect on startup". When you restart the pc, it should boot to the rescue disk. Launch the partition program and resize your partition. This worked like a charm for me, as now windows can see my new, larger partition.
Look at this thread for a step by step read of the process. http://forum.parallels.com/thread1278.html