Disk image not compacting fully in Virtual PC 2007

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?
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Microsoft_BobAuthor Commented:

Well, I solved my own problem, although I don't fully understand why it worked.

I created a disk image of the virtual disk using Ghost, then immediately wrote that image back onto the virtual disk.  Then, after running precompactor and compact, the size was down to 1.45 GB.  I'm not sure why this would occur, because all it seems to have done was de-fragment the free space on the virtual drive, not actually reduce data stored on it.

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