Converting VMDK files to thin provisioned

To convert VMDK files in ESX/ESXi you'll need to login via SSH and run this command in the datastore.

vmkfstools -i fatdisk.vmdk -d thin thindisk.vmdk

Don't forget to either rename the existing disk (and edit meta data) or change your VMX file afterwards to point to the new disk.

Does take a considerable time though!