Creating virtual disk
How do I create a virtual disk in Ubuntu?
Open a terminal (Applications -> Accessories -> Teminal), and enter these commands (this will create a 10 GB extra.virtual.disk, adjust line 2 to change these):
cd /host/ubuntu/disks
dd if=/dev/zero of=extra.disk bs=1MB count=10000 seek=1
mkfs.ext3 -F extra.disk
How do I create a virtual disk in Windows?
You can use qemu-img for that. Another dirty (but working) trick is to copy any other file of the desired size to C:wubidisks and rename it "root.disk", "home.disk", "swap.disk" or "extra.disk". Thats the Wubi equivalent of buying (and installing) a new hard disk.
If you are running Windows XP (may work in Windows 2000 and Vista as well) you can create a file by using the fsutil that is included with Windows. The command format is fsutil file createnew filename filesize where filename is the file you wish to create and filesize is the size of the file to be created in bytes.
alternative link download