Why does VMware VM believe its disk usage is larger than it is?

In VMware Workstation 10 I can go to the VM menu, Manage, "Clean Up Disks..." and then magically, it will reclaim a ton of space.

What I don't understand is how the resulting folder for my VM is now only 80.1 GB. If I boot Windows in the VM and view the disk usage, it's about 91 GB. How is this possible?