The pvm contains a virtual disk, the size of how it appears to Windows, is controlled by the disk size setting in Parallels VM configuration, the free space plus used space give a size of 64 GB, even thou on this computer the virtual disk could never use all those 64 GB as it's limited by the hardware. So that to explain the divergence between free spaces.
As the virtual expanding disk is used and there's some fragmentation as you install/uninstall programs, create, delete files, so the Virtual disk file ends up taking more space than the actual used space inside the VM, this discrepancy is natural, in your case is 4-5 GB, as the previous user said, the way to reclaim some of this 'elastic' space is to use the 'Compress'. This will, at best, reduce 4 to 5 GB on your VM, it won't make 14 GB in your case since the VM is actually using 22 GB.
If you really want to reduce it further you'll have to reduce the eliminate some files on the Windows side, first I would reduce the size of the virtual hd from 64 to 32 GB, since some apps and services use space based on a percentage of the total disk size, this is true for Windows Restore/Recovery, Recycle Bin and Browser's Cache among others. Secondly, you might want to purge the cache of your browsers (IE and Firefox). You also might use a program such as CCleaner to get rid of temp files.
Also there is a file called pagefile.sys in Windows that is the size of the current RAM allocated to the VM, this is a necessary file, and if you delete it it will be recreated again, but if you have 2 GB of RAM assigned to the VM, you'll have a 2 GB file added to all other files, and if you have hibernation enabled (you shouldn't/don't need on a VM) it's another 2 GB file always there, this to explain how Windows gets to consume a lot of space, via mostly temp files, and caches.
Finally defragment the virtual drive on Windows, this will make the compression more efficient, then 'Compress'.
Note: I agree the Parallels Staff members should be more helpful/knowledgeable, it's a glaring omission YanaYana didn't mention Compress.
Last edited: Oct 10, 2012