Why is it taking up 46 gigs? Is the software with XP really 26 gigs? Doesn't seem right.... any thoughts?
Based on the information in the screenshots you have snapshot(s) in place even if they are not showing in the Snapshot window. These can be a manually created Snapshot and or AutoProtect Snapshots. Note: These Snapshots can also be orphaned in that they do not appear in the Snapshot windows yet they are still critically linked to the Base Disk and if they cannot be processed normally one method to attempt to clear them is to take a Snapshot and then immediately delete it. Also depending on the type of virtual hard disk, monolithic or split, the former of which requires at the minimum its size plus a little extra of free disk space on the Host to properly process where the latter only needs a little more then 2 GB of free disk space on the Hosts to process properly. If normal methods cannot remove the snapshots then alternate methods need to be use and this can involve using disk imaging software or one can use VMware vCenter Converter to consolidate linked orphan snapshots and the base disk back to a Virtual Machine without Snapshots..
Have a look at: VMware Fusion (menu bar) > Help > VMware Fusion Help > Using Snapshots and AutoProtect
It looks like 7.7g + 13.9g (21.6g) of the uncertain 26 gig are taken up by snapshots. Crazy- thanks for the tips!