It depends on your destination of the VM. In general the following rules apply
1. When imaging to VMware Workstation or VMware Player you can set the disks to "grow" to the full size. This means that as more data is stored on the disks of the VM then the disk files that make up the VM will expand up to the size for the virtual disks.
2. When sending the VM to an ESX server then by default it is automatically made the full size. This has the advantage that you are not likely to run out of space on your ESX server volume causing all VMs located on that volume to fail. (There is a caveat to this if you are using NFS mounts to host your VMs but I will assume that is not the case). So ESX really only supports the "preallocate" method.
Leonard...
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Don't forget if the answers help, award points
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Don't forget if the answers help, award points