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How do you delete a virtual machine?

The recommended size for a WindowsXP VM is 10 GB. I installed Windows XP SP2. I tried to update to SP3, but couldn't because the VM was too small. Can I increase its size? If not, then I create a new, larger one. But the dialogue says 10 GB is recommended and I don't see how to make it larger.

Just right click the VM in the GUI and select "Remove". You will next be asked if you want to delete the physical files from the host - answer yes if you want them to be gone forever, releasing host space. If you answer "No" then the files remain on the host drive and the VM can be re-registered using "Machine|Add".