Parallels Compressor (in Parallels Desktop 4) fills disk with zeros (it creates special empty files in user folder). It is long operation. During this operation windows could show message about problem with virtual memory (low virtual memory).
1. Please, check C:\Documents and Settings\<username> folder (when compressor software within guest os will be "frozen"). Are there files PrlsCmps0.dat, PrlsCmps1.dat etc.? (NOTE: at the end of work Parallels Compressor removes this files).
2. What filesystem is used within guest OS?
3. How many free space on you virtual disk?
4. Have you got a ticket number (from support team)?
In any case compacting is much better in Parallels Desktop 5. Did you try demo version of Parallels Desktop 5?
Last edited: May 20, 2010