You cannot resize a boot partition in Windows XP with DISKPART. You can use Partition Magic, but that maybe too expensive for your tastes ($70 to fix one problem was for me). Here's what I found by searching this forum and trial and error.
1. Download the GPartEd Live CD ISO image. Here's the link I used, but if there is a later version, get that one instead (
http://easynews.dl.sourceforge.net/sourceforge/gparted/gparted-livecd-0.2.4-3.iso).
2. In your Parallels VM, go to File -> Edit Configuration and change the CD/DVD-ROM drive to use the ISO image file you downloaded.
3. Boot up the VM. Wait for Linux to boot up (this may take a minute and will run a bunch of text by you on the screen).
3a. Select your language (default is US English) and press Enter
3b. Select your keyboard (default is Qwerty/US) and press Enter
3c. Select "Xorg" (the default) X-serve Type and press Enter
3d. Select "vesa" (the default) as the video driver and press Enter
3e. Select "24" (the default) as your screen depth and press Enter
3f. Select "1024x768" (the default) as your screen resolution and press Enter
4. Let GParted finish booting up. It will put you in an X-Windows session and start the GNOME Partition Editor (GPartEd).
5. Click on the partition you want to resize (in my case, /dev/hda1).
6. From the menu in GPartEd, select "Partition" then "Resize/Move".
7. You can either drag the graphic in the dialog box to the size you want or change the numbers in the "New Size" and "Free Space Following" boxes. If you only have one partition (your boot partition) and want to expand it to fill the entire disk, set "Free Space Following" to zero (0) and press the "Tab" key to exit the box. This will change the "New Size" to the entire disk (assuming your "Free Space Preceding" is zero (0)).
8. When you have the boot partition resozed, press the "Resize" button then press the "Apply" button in the toolbar. If, after pressing "Resize" you wish to cancel the resizing, press "Undo." When you press "Apply", you will be prompted to confirm your decision. If you absolutely sure, press "Apply". Otherwise, press "Cancel".
9. Wait while GPartEd resizes your partition. Hopefully, you will eventually see a message that all operations successfully completed. If so, click "Close" to close the dialog box.
10. Give GPartEd a moment to refresh its partition information. Then click on the "GPartEd" menu and select "Quit."
11. Right click anywhere on the desktop and select "Reboot."
12. When your VM reboots and you get to the GPartEd splash screen again, shutdown your VM.
13. Click on File -> Edit Configuration and change your CD/DVD-ROM emulation back to whatever you had it set to before.
14. Boot up your VM and cross your fingers. XP will probably run "Check Disk" on the newly resized drive then reboot. That's okay. In my case, I also got a prompt that XP had found a new device and installed drivers for it and then rebooted again. Your mileage may vary.
When all was said and done, I ended up resizing a 4 GB drive to 20 GB with 16.2 GB free.