In the past, when my fixed disk was too small, I'd create a new fixed disk and install a fresh copy of WinXP. I'm too busy for that now, so I checked Google to see if there were any hacks to increase the size of a fixed disk. I assumed to find nothing, but I found VHD Resizer. Cool.
VHD Resizer - handy tool for people to use that need to expand a VHD.
At this point, I thought that I'd be able to use Windows tools to expand the C: drive in the VM to use all the space. I opened diskpart and it found all the space but since my partition was the boot partition I couldn't use diskpart. I had to use BootIt NG for the resizing.
BootIt NG - simple partitioning tool.
Unfortunately, BootIt NG didn't come with a standard floppy image (that I could directly capture in VPC) and I didn't know how to create a floppy image so I had to search once more. WinImage was overwhelmingly popular and I tried it - worked great.
WinImage - tool for creating disk images - I used it to create a blank floppy disk to capture in VPC.
In the VPC, I captured the blank floppy image that I created with WinImage. I then used the makedisk app in the BootIt NG download to write the BootIt NG stuff to the floppy. I rebooted the VPC and used the menus to expand the partition to consume all available space and then released the floppy image. Finally, I booted the VPC again and had all the space available as I had hoped.