Resizing a Virtual Hard Drive (VHD)
I recently created a Vista Virtual Machine but ran out of space when I tried to install the service pack. Dynamically expanding does not mean that the VHD will expand forever, but it will expand until the limit set for it at creation. This means that I hit the ceiling of the VHD. So, the best option is a low cost one that requires you to use vhdmount from Virtual Server 2005 R2 SP1.
The following post outlines the detailed steps
http://agramont.net/blogs/conrad/archive/2007/01/04/Copy_2F00_Increase-a-VHD-using-VHDMount.aspx
Basically, you mount the vhd for the old (small drive) that needs to be expanded and then create a new vhd for the new (larger drive) that you want to migrate to. You then mount them both using vhdmount and xcopy contents from one to the other.
