If you aren't quite familiar with why software like VM Compactor needs to exist, here's a quick example: with an app like Parallels' Workstation (which has been creating so much buzz in the Mac world lately), you can install and run multiple operating systems, such as Windows and Linux, inside of Mac OS X. This is referred to as 'virtualization' and is a bit different - and some would say more useful for general tasks - from using something like Boot Camp which requires you to shut down Mac OS X in order to boot into Windows.
Well, over time, these other OS installs, called 'virtual machines,' can begin to take up extra and needless space on your hard drive, even when Parallels Workstation compacts and compresses their installation after each time you finish using them. This is where VM Compactor comes in: its purpose is to clean up, optimize and strip the fat out of these installs to make sure they run as well as possible and take up the least amount of disk space necessary.
Parallels VM Compactor is in beta and offers a 30-trial, which suggests it should be available for retail purchase within the next month.