From the old, old days of the first iteration of Parallels' disk compaction function to even the current one in the latest RC, it never quite worked with a disk volume that's been compressed with NTFS compression option. NTFS compression is a nice way of reducing data footprint with minimal performance hit., so I was annoyed by the fact that this could not be used with Parallels' compaction function to bring down the VM's storage footprint down to a real minimum. What happens when Parallels Compactor tries to 'compact' a disk with NTFS compression? The compaction process goes on for several hours on end without actually compacting the volume. In fact the size of the disk file actually grew on several occasions. Under normal circumstances the process doesn't run for more than 20 minutes on my machine, by the way. Then out of curiosity, I just applied compression on individual folders in the volume, and then tried running Parallels Compressor on that. In this case, the compaction function worked fine. Right now my full Windows XP installation takes only 1.37GB physically on my Mac mini hard disk. I'm still clueless as to the original problem's causes, but at least I have a workaround at hand.
