MS has some work to do making the "Consolidate Free Space" option more useful--it'd be nice if virtual pc could recognize different file systems to know what was free space and what wasn't.
In an MS world, not knowing this is fine--just defrag (consolidate free space), zero fill the free space with any number of programs on the market (like BCWipe), and your fine.
With non-ms OS's this becomes a little more difficult.
I have a Suse Linux 10.1 guest with Oracle 10g loaded because I need snapshot in time ability--i.e. load data, and then revert back to what it was right before I loaded it.
However, one of my co-workers was loading the data and filled up my hard drive because the wrong stuff was loaded. Now I have a virtual hard disk that I can't shrink because NO defragmenting utilities exist for ReiserFS (linux doesn't need defragmentation--right . . .). I'm zero wiping the free space and hoping for the best. Ah--shoot--scratch that--the wiping of free space is increasing the file size. So much for that idea! Guess I get to reload.