HOWTO: Compress Virtual PC virtual hard disks

If you use Virtual PC 2007 you know that the virtual hard drive files (.VHDs) can grow to extremely large sizes. Part of this is because the .VHD files dynamically expand when software is installed in the .VHD however after the installation, the original setup files are deleted and no longer take up space in the .VHD, however the .VHD does not correspondingly dynamically shrink in size. Once a .VHD file expands - it doesn't shrink.

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