This is probably common sense, I had a bad feeling before I tried this, but I backed up my VM first so who cares. 
Anyways... I turned on disk compression in Windows 2000 and let it shrink my HD. Previously it was using 1.8GB, and after that it was somewhere around 1.3GB. Took an hour or so to run. After THAT... I of course ran Parallels Compressor!
Well basically it's been running all night and several extra hours... still on the "Preparing for Compacting" stage. The little HD light is blinking away and I guess it's working? I've compacted before this and it only took a few minutes, so I'm guessing Windows drive compression and Parallels Compactor are not exactly the best of friends.
Now in the old days of Windows 95... drive compressing simply made one huge file with everything stored inside it. If you booted in DOS or Linux you could see how it was set up. That type of compression should easily work well with Compactor, but I'm guessing Windows 2000 does it differently in a way that's not compatible?
Anyways... I turned on disk compression in Windows 2000 and let it shrink my HD. Previously it was using 1.8GB, and after that it was somewhere around 1.3GB. Took an hour or so to run. After THAT... I of course ran Parallels Compressor!
Well basically it's been running all night and several extra hours... still on the "Preparing for Compacting" stage. The little HD light is blinking away and I guess it's working? I've compacted before this and it only took a few minutes, so I'm guessing Windows drive compression and Parallels Compactor are not exactly the best of friends.
Now in the old days of Windows 95... drive compressing simply made one huge file with everything stored inside it. If you booted in DOS or Linux you could see how it was set up. That type of compression should easily work well with Compactor, but I'm guessing Windows 2000 does it differently in a way that's not compatible?