First start the Paralels Desktop.
Clik on Hard Disk 1 in the configuration window and then the next page will show hard disk options . there you can select the "Use BootCamp" and then clik on recreate button. Its all downhill from there. Enter the size of harddrive you want and it will be recreated. You can also select FAT32 or NTFS. I would sugest NTFS Of course you will lose any info you have on the initial harddrive because you are increasing it in size. Save it prior to doing this operation. I just increased mine from 8 gig to 20 gig.
Hope that helps.