Just found this cool little program, vOptimizer. It compresses virtual machines to their smallest size with one click.

vOptimizer is an advanced optimization solution that quickly and easily reduces a virtual machine’s virtual hard drive to the smallest size possible while optimizing Windows guest operating systems for speed and performance. vOptimizer offers many new functions for enterprise level customers while improving the interface and ease of operation for smaller, desktop oriented users.

vOptimizer is available in Desktop Edition oriented for optimization of local VMs, and an enterprise ready Network Edition for optimization of VMs located anywhere on the network.