Why is the .hdd file for a .pvm much much larger than the total space of the drive? I have a Windows 7 VM which has a 100GB drive with 30GB free. However the .hdd file that represents the drive is 168GB.
Have you got the option set to compress Virtual Hard Disks in Parallels? If not, was the disk larger at some point in the past? If the compression option isn't set, the space wouldn't have been freed up. Which version of Mac OS and Parallels are you running?
It's Parallels 7 on OS X 10.8 (Mountain Lion). This actually used to be a smaller drive (50GB) that at one point was resized to 100GB. It's not set to compress, but even without that setting, why would a 100GB raw drive space require 168GB, never mind the fact that it's using only 70GB at the moment. I can imagine some optimization and implementation details that might make it so, but if that's the case it makes it impossible to plan how much drive space you'll need for a given VM.
Since it has never been larger than 100GB, then i'm not sure how it's happened. If the disk was ever larger and not set to compress, it would make sense. I'll double check some of my VM's and see what sort of difference in space i'm seeing.