How To Lower The Disk Space Needed For Full Blockchain? I'm looking to run bitcoind on a virtual machine.

However the main nets Blockchain size is over 21GB, and growing. 

Is there a way to compress this down or lower the amount of disk-space needed for the full Blockchain?
No, there isn't any straightforward way to reduce the disk space requirement.  The block chain is the size that it is.

There are various ways proposed for bitcoind to use less disk space (see diskspace), but as far as I know, none of them have yet been added to the standard distribution.