Delete Virtual Machine Created On Windows 7
Before you go any further I would like to suggest that you backup your data just in case something goes wrong. Also, this procedure will permanently delete the .vmcx and .vhd file on your Virtual Machine and recovering your hard disk space.

How To Delete Virtual Machine:
1. Make sure the virtual machine is closed or shut down.
2. In the Start Menu, click All Programs , expand the Windows Virtual PC folder and double click the virtual machines shortcut.
3. Right click on the virtual machine you want to delete and click Settings.

4. In the left column, select ‘Hard Disk’ whose Current Value column shows a .VHD file.
5. In the right side dialog box click the ‘Browse’ button and right click the .VHD file. Click Delete and click Yes to confirm in the pop up dialog box.
6. Now Close all the Windows except the Settings window opened initially.
7. Right click the .VMCX file for the virtual machine you want to delete and then click on delete.
8. Now close the Windows and empty the recycle bin. Thats it!
You have just recovered a huge chunk of hard disk space and will be happy to download a few more movies!
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