virtualbox.org

Have a 30GB disk, 1 boot partition taking up the entire disk. Disk is full so need to increase size to 40GB.

Shutdown the VM and create a new dynamic VDI 40GB. Attach CDROM of GParted 0.8.0-5.iso. Attach new VDI and old VDI. Fire up GParted on the Guest, create new partition table on /dev/sdb1 and copy /dev/sda1 to /dev/sdb1. Mark /dev/sdb1 as bootable.

Reboot with only new 40GB VDI attached. Works like a charm.

Reboot with gparted ISO CDROM attached - drag the partition to the full size of the disk.

Win XP seems to boot OK. Later on after a reboot, I get "Windows XP" where Welcome should be, and everything locks up. Safe Mode does not get me past this either.

Any ideas? What have I done wrong here?

You went wrong in doing it the hard way. You can use "VBoxManage modifyhd <file|uuid> --resize <size in MB>" since 4.0 to change the VDI max size. Only enlarging is supported. Then you can use Gparted to enlarge the partition inside. You can also use Mpack's CloneVDI tool to increase the size.
If you want to do it the 'old' way, then you might have wanted to increase the size from the beginning, after the partition copy. What you can try now, is boot a Windows XP install disc, go to recovery and run 'fixboot' and 'fixmbr'. Then reboot and see how that went. A checkdisk (chkdsk) could also help.