OK, Long story short. I've been noticing a steady performance degradation with each successive build. Start up times have gotten worse and worse. After starting up, it's up to about 90 seconds after the Windows start menu shows before I can click on it. VMware sternly suggests doing a fresh XP install when upgrading from beta 3 to beta 4 due to code changes. I installed Beta 4 and did a fresh install of XP using the inline install. I was amazed how much faster it started up and how much snappier it felt than Parallels. So I decided to try a fresh install of XP in Parallels as well. I have to say ...... it is MUCH faster than my primary XP machine. I'm not sure if it is software installed on my XP install or if it is just the many installs and uninstalls of parallels tools or what. Anyway, I just wanted to throw this little tidbit out there.
Perhaps the disk space in your old VM is fragmented. It's not a bad idea to defrag OS X and then defrag Windows from time to time. There's not much point in defragging Windows alone because OS X may have the VM .hdd file scattered all over the physical disk. Do both in the suggested order - can't hurt.
My VHDD was created as a 32GB drive, and it is contigious. After I created the VHDD I used Carbon Copy Cloaner to move my entire OS X drive to an external, wiped my internal drive and CCC'd everything back. That should in theory have made sure my VHDD was contiguous. The *only* programs I have added / removed on that VHDD is parallels tools. I honestly cannot see how badly that could fragment the drive. I will run a Windows defrag, but I had Office, Turbo Lister, Visio, Project and my Cisco Simulators all installed prior to installing Parallels Tools. The drive is NTFS formatted, and was created with 2.5. It's just not old enough or had enough erases / rewrites to really be so badly fragmented that it would make such a drastic slowdown. I was more tossing this idea out there to those people experiencing the major slowdowns which were reported over and over again in a different forum. Perhaps *some* of us are experiencing issues with a VHDD which was created using a specific build number. I cannot recall which build number I used to create this drive (there have been so many builds and so many VMs I have created). Having a VLK it is no big deal for me to try this out. I'll be installing my programs on the new VHDD and seeing how it all goes.