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I'm using Windows 7 on VMWare (i'm on mac).

In the hard disk settings of the virtual machine I've set Disk Size to 65GB, I've selected pre-allocate the space and Applied for it.

However when I run Windows 7 I still the old amount of space, and not the 65GB. What am I doing wrong ?

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You will need to use a tool like EASEUS Partition Manager to reallocate the addition space you provision to the VM in the Host OS. I actually wrote up a guide on this for some co-workers, you may find it useful: How to Expand Your VMware Drive Image

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Like Rob said, even though VMWare can allocate more space on the fly, Windows is still unable to expand partitions (or shrink them, for that matter) on the fly. You need a 3rd party partition utility. Gparted (gparted.sourceforge.net) is another popular free utility to do so. – Uninspired May 3 '11 at 22:23
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