Expanding a virtual disk is a pretty straight forward task. Make sure the VM doesn't have active snapshots and then increase the virtual disk's size by typing in its new size in the VM's HDD settings. After increasing the virtual disk, you need to grow the partition within the guest OS itself. For Windows 7 this can be done in the Disk Management GUI.
Remember that in case you have configured a monolithic virtual disk for the VM (i.e. a large single .vmdk file), a new virtual disk will be created and all contents will be copied over to this new .vmdk file, which will not only take quite some time to finish, but will also require additional temporary disk space.
André