Quoting from the Parallels official announcement:
Parallels Compressor, released today, is a powerful, easy-to-use, universally compatible management tool that helps companies using almost any server and workstation virtualization platform conserve valuable hard disk resources and optimize the performance of their virtual workstations and servers by reducing the size of virtual hard disks by 50 percent or more,
Compressor works by automatically deleting temporary and unnecessary files within Windows, and then compressing the actual virtual hard disk image file.
As part of its goal to bring virtualization to everyone, Parallels is making Compressor available to any individual or enterprise using Parallels, VMWare and Microsoft solutions running Windows 2000, 2003 and XP. The company plans to expand its portfolio of tools over the coming months, and pledges to make those tools compatible with all of the industry’s major virtualization solutions, including the open-source Xen hypervisor, and a broader variety of operating systems.
Compressor is available in two versions. Compressor Workstation, which retails for $49, is specifically optimized for virtual workstations. It is compatible with any Parallels, VMware and Microsoft virtual workstation running Windows 2000 or XP. Compressor Server, available for $179, is a professional-grade tool that optimizes any virtual server built using Parallels Server (due late 2006), VMware GSX Server, VMware Server, Microsoft Virtual PC, or Microsoft Virtual Server, or any virtual workstation built with Parallels Workstation 2.1 for Windows or Linux, Parallels Desktop for Mac, or VMware Workstation. Compressor Server is compatible with Windows 2000, 2000 Server, XP, and Server 2003.
The virtualization.info Virtualization Industry Roadmap has been updated accordingly.