- New disk size is 40GB.
- Current virtual disk is foo.vdmk
- Current VM image is at /Users/foo/Documents/Foo.vmwarevm
- Open up a teminal window
- Run: cd /Users/foo/Documents/Foo.vmwarevm && /Library/Application\ Support/VMware\ Fusion/vmware-vdiskmanager -x 40GB foo.vmdk
- Resize the host OS with a third party tool. In my case I was resizing a NTFS partition with XP installed on it. Easeus Partition Manager home Edition did the trick for me.