After VHD Utility has been used to increase VHD storage capacity, the newly added space will show up as un-partitioned. The file system partition has to be extended to fill the newly added space (see explanation here). How that can be done, depends on a particular guest operating system and file system stored on the VHD. On Microsoft Windows, DiskPart, a free utility from Microsoft, can be used to extend an NTFS partition. On Windows, one also can use commercially available Partition Magic, Acronis Disk Director. On Linux e2resize tool can be used for this purpose.
DiskPart is included in Windows Server 2003 and Windows XP as part of the base operating system. For Windows 2000 DiskPart is available as free download from Microsoft Web site.
If your VHD is a data only disk, that is it is not system or boot disk and does not contain a system page file, go to the next step.
The current system or boot partitions (see definition here) can not be extended,
as well as a partition which contains the current system page file.
The first approach to overcome this hurdle is to temporally attach the VHD to another Virtual Machine as a second hard disk.
Make sure that the "Undo Disks" option on that machine is disabled.
Another approach is to use VHD Mount to mount the VHD as a disk on the host machine.
VHD Mount is part of Microsoft Virtual Server 2005 R2 SP1.
If you don't want to install the complete Virtual Server modify the setup options to install only VHD Mount.
By default VHD Mount is installed in the [Program Files]\Microsoft Virtual Server\Vhdmount directory.
Run the following command to mount the VHD:
On Windows XP
vhdmount /p /f <VHD File Name>
On Windows Server 2003
vhdmount /m /f <VHD File Name>
After the VHD is mounted using VHD Mount on the host machine, it will be available in the DiskPart utlity, running on the host machine.
Once the Virtual Machine to which the VHD is attached has started (or the VHD has been sucessfully mounted with VHD Mount), start Diskpart and get a list of volumes.
At a command prompt type diskpart, then type list volume.
In the list of volumes, select the volume you want to extend. In this particular case it would be volume 2. Type select volume 2
Get volume information to make sure you have selected the right one. Type detail volume.
Extend the partition, so that it takes up all available space and get volume information to make sure the extension was successful. Type extend, then type detail volume
Type exit, to quit DiskPart utility.
If you temporally connected the VHD to another Virtual Machine, disconnect it now.
If you used VHD Mount, un-mount the VHD using the following command:
vhdmount /u <VHD File Name>
Microsoft KB article 325590 "How to use Diskpart.exe to extend a data volume in Windows Server 2003, in Windows XP, and in Windows 2000".