Ok, so my VHD is a little too small for what I'm trying to do.
My local disk is cheap to use - it's built in, and already paid for. Buying another one is not. This is part of the reason I run VHD's - it's much easier to spend only time to stand up a new server, rather than the outlay for a new server box.
That said, if I can get a bigger VHD/Hard Drive File when I need it, VPC/VHD isn't going to do me much good, is it?
I found this great writeup:
http://www.cosky.com/expanding_a_virtual_pc_vhd
