You need to have contiguous space. You have a 6GB partition in between the E partition and the unused space.
The image shows you having selected the E drive. Your post says C which is it? Adding disks together requires dynamic disks. Dynamic is not a good choice for a boot disk.
As DSTAVERT said, it looks like you selected the E partition, not the C:\ partition
If you really want to extend the C:\ partition, you will have to add space to that VMDK, rescan the disk, and use the "extpart" utility from Dell to expand it. Here is the instructions on how to do that: http://h0bbel.p0ggel.org/howto-using-extpart-to-expand-windows-server-2003-vm-boot-volume
If you actually wanted to expand the E:\ partition, you need contiguous space to do that. If you are not using that 6GB volume, as it does not have a drive letter, right click and delete that partition. You should then be able to extend the volume with diskpart or extpart.
Jonathan Kohler
VCAP4-DCA / DCD
Another way to resize the disk (but it's much slower) is use VMware Converter.
Andre
In windows server 2003, you can not use disk part to increase system partition even though you delete the secondray partition to get an unalloacetd space,
by this way you could only extend data partition, In Windows Server 2008/vista/windows 7, this feature is activated, but in windows server 2003, I suggest to use some third-party software, here is an aticle, I hope could help you, "How to extend system partition in Windows Server 2003"
Try extpart from dell maybe?
http://www.get-virtual.info/tag/extend/