Parallels Desktop Minimum Hard Disk Space to allocate?
If you check the space each VM actually takes it is dynamic. For example Windows might say 64GB of space remain, but in reality the size of the image it is in is actually a lot smaller. See here:



As you can see it only takes up 34GB rather than 64GB. A way to reduce space would be to uninstall applications or features you do not need within windows. I have done this with my Windows 8 VM.