Virtual PC Disk Wizard

Hey guys, I'm trying to compact my disk for Windows 7 on Virtual PC 2007's Virtual Disk Wizard to make Windows 7 run faster. However, when I click Compress and it does its stuff, I notice my free hard drive space go down instead of up. What's going on? :blink:

P.S. I don't have the CD image file anymore so should I compact it? I have 8GB of free space and I'm replacing the file.

I think the Windows Setup CD cannot be compacted with any software. I had earlier tries to compress the Windows XP set up CD but was getting the compressed disk slightly larger than the original total size... similar to this case.