I created a virtual machine and installed Windows XP SP2 and then made a backup file of the image, which was 1.4 GB. I then downloaded all Windows updates and installed them, then deleted a whole bunch of stuff that I didn't need from the image. Then, I ran Precompactor, and then compact on the disk image. The image is 2 GB, even though the files on the hard drive only add up to 1.45 GB. So I'm wasting 600 MB of disk space. I even ran Defragment on the virtual drive.
This makes no sense to me. Why is the disk image taking up so much more room?