How to shrink your disk on VMware Player 5 ?

As the option seems to have disappeared from the VMware tools menu, these are commands to shrink your VMware disk on Windows or Linux.

Shrinking the virtual disk in a Windows virtual machine

To shrink the virtual disk in a Windows virtual machine:

1. Power on the Windows virtual machine.
2. Open a Command Prompt with administrator privileges.
3. Run these commands:
   
   cd C:\Program Files\VMware\VMware Tools
   C:\Program Files\VMware\VMware Tools> VMwareToolboxCmd help disk
   This displays a list of options that are available for shrinking.

Shrinking the virtual disk in a Linux virtual machine

To shrink the virtual disk in a Linux virtual machine:

1. Open Terminal.
2. Run these commands:
   
   cd /usr/bin
   
   /usr/bin$ vmware-toolbox-cmd help disk

source: http://communities.vmware.com/thread/420371