A week or two ago I increased the size of the virtual disk image that Windows XP was using - from 9 to 20 Gb - using the Parallel's image tool. Actually, I changed it from Expanding to Fixed size as well, as I found hints that it would improve performance, which is a bit slow in Windows.
Today I got Low Disk Space warnings, and found that C: was only 9Gb. I tried using these instructions to expand the NTFS partition up to the whole space available.
I also got into the Virtual Machine settings in Parallels and changed it so that it was using Shared Networking (VM and host appear on same IP), and Shared Folders for My Documents = Documents. Now My Documents is my Mac's Documents folder, which is much better than having to access a network drive (X:).
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