adjusting hard disk size breaks windows

Hello, hoping someone can help. I'm upgrading my guest OS from Vista to Windows 7 but to do so I need to make the Guest OS hard drive bigger. If I shut down my guest OS (Vista), and then go to configure>hardware>hard disk 1 and then adjust the size of the disk, Vista will no longer boot. I simply get a screen that says I have to reinstall Windows. This has happened the exact same way on both my laptop and desktop.

Fortunately, I have a back up on a USB Hard Drive, but a 30GB file takes a while to pull back and forth and it's not something I really want to keep testing over and over.

Has anyone else seen this? If so, how did you fix it?

Any help would be greatly appreciated. Upgrading Windows is frustrating enough, I don't want to fight Parallels as well.