You can ignore this message for now, as you can move this virtual machine to a drive that can fit it. The virtual disk's size should be large enough to hold the guest operating system and all of the software that you intend to install in the virtual machine, with room for data and growth. You cannot change the virtual disk's maximum capacity later, although you can install additional virtual disks if you run out of space on this one. For example, you need about 500MB of actual free space on the file system containing the virtual disk to install Windows 98 and popular applications such as Microsoft Office inside the virtual machine. Enable the CD-ROM drive.
Most operating systems require the use of a CD-ROM for installation.
Select CD-ROM Enabled. If you wish, you can disable access to the CD-ROM drive later from the virtual machine on the Devices menu. Enable the floppy disk drive. To enter the path to the floppy drive, Click Browse or type the path to the physical floppy drive. Some operating systems may require the use of a floppy drive during installation.