I had to increase the size of a virtual machine on a Windows 2008 R2 host. I'd go to the settings of the VM and click on "edit" would be greyed out when attempting to edit the hard drive size. It looked like this.
I needed to do three things to resize the disk:
1) shut down the VM
2) Delete all the snapshots of the VM
3) Let the VM merge itself to all previous snapshots - see this
It can take minutes or hours for the merge (#3 above) to take effect.
After the merge has taken place, you can increase the size of the disk and then you'll need to extend the size of the hard drive within Windows of the VM: