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I loaded a Windows XP iso into Virtual Box and my computer went from 415 to 407 GB, how did this happen?

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I'm really not sure what you're asking, but I'll give it a shot.

When you create the hard disk image for your VM, make sure to select "Dynamically Expanding Storage":

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This way, the machine will only take up as much space as it really needs, not the full n gigabytes right away.