Why am i not able to do this? option is greyed out when i edit the VM..?
Do i need to shut the server down to be able to extend drive?
Yes, you have to.
Or without shuting down the Vm, you can add a new disk live and extend the logical drive on it.
windows 2008 r2 you can do a hot expand. even on windows 2003 the data drive can be hot expanded.
Yes true, but it's depend on your host licence type.
With standard, you can't.
Make sure you don't have any snapshots on this VM, as this will prevent you from growing the disk(s).
Ok, I need a coffee...