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Increase OS partition size in Windows 2008 VM in VMWare

Hi,
  I have VMWare V5.1 with several VMs. One of them is Windows 2008 Server and it is running out of space and I need to increase the size.
 When I check the storage section in VShpere Client program, it shows that is about 67GB available.  In Windows 2008 Virtual Machine, I have about 16GB left. I ran DiskMgmt and right clicked on the drive C, but I don't see "Extend" option.
 With that I have two questions.
 (1) Why Extend option is recessed?
 (2) If I extend, knowing that there is 67GB total available, how much space in GB would be safe number? Is there a danger of assigning all 67GB to this W2008 VM?

Thanks.
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sglee

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Andrew Hancock (VMware vExpert PRO / EE Fellow/British Beekeeper)
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@Andrew
Can you elaborate on "or it's a system OS disk you have."?

Fyi, there is an old VM (no longer used) that I can delete and it will free up about 150GB of space.
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You don't have any un-allocated storage space on the disk, hence why the option is grayed out.

you can delete the old VM, and then increase the disk space on this VM.

see my EE article for details.
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User generated imageIf I remove old VM, free up about 150GB of space, shutdown Windows 2008 VM and go into EDIT Settings of the VM, I can enter a new number in Provisioned Size?
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I have backup program called Nakivo. Does it create a snapshot when it is doing the backup of VMs?
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Sounds like it is not that simple. I have decided to leave it as it is until I have to.
For now there is 16GB of space left and is enough to get by.