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Thanks John - just a quick query to upping the RAM to 1GB - may seem an obvious point but...
1. If I increase the VM's memory to 1GB, then am I right in that the rest of my imac will only be using 1GB (it has 2GB memory)?
2. If this is the case, when the VM is closed will that free-up the 1GB it has been allotted?
3. Outside the VM, I use potentially memory-hungry applications like Logic and Aperture, therefore would there be a case for increasing the total RAM on the machine?
At the risk of repeating myself, I urgently need to create extra space on my imac's hard disk. As far as I can gather do I simply need to make a cloned VM to my external hard drive and delete the VM on my imac?