Assuming your VM is an "expanding" type, which is the default installation, then 40Gb is the MAX the VM can be. The actual size of the VM as seen from the Mac will depend on how much data you have in the VM. You can get the VM file size down to it's minimum by running compressor from the Parallels menu while the VM is running.
So unless your 40Gb is a fixed size during the creation, there is probably no need to bother changing it.
To reclaim the space just delete the VM folder.
Just noticed you mentioned partitioned HDD space. Have you created a separate partition of 40Gb? If so you will need to use something like iPartition to resize the partitions, or backup, format, restore.
Last edited: Sep 24, 2007