diff --git a/tools/appliance/build.sh b/tools/appliance/build.sh
index 366b246fbe2..4d9d8bd19dd 100644
--- a/tools/appliance/build.sh
+++ b/tools/appliance/build.sh
@@ -40,7 +40,10 @@ done
 
 # Get appliance uuids
 machine_uuid=`vboxmanage showvminfo $appliance | grep UUID | head -1 | awk '{print $2}'`
-hdd_uuid=`vboxmanage showvminfo $appliance | grep vmdk | head -1 | awk '{print $8}' | cut -d ')' -f 1`
+hdd_uuid=`vboxmanage showvminfo $appliance | grep vdi | head -1 | awk '{print $8}' | cut -d ')' -f 1`
+
+# Compact the virtual hdd
+vboxmanage modifyhd $hdd_uuid --compact
 
 # Start exporting
 rm -fr dist
diff --git a/tools/appliance/definitions/systemvmtemplate/definition.rb b/tools/appliance/definitions/systemvmtemplate/definition.rb
index a839182bbd9..df9589c12cf 100644
--- a/tools/appliance/definitions/systemvmtemplate/definition.rb
+++ b/tools/appliance/definitions/systemvmtemplate/definition.rb
@@ -1,7 +1,7 @@
 Veewee::Definition.declare({
   :cpu_count => '1',
   :memory_size=> '256',
-  :disk_size => '2048', :disk_format => 'VMDK', :hostiocache => 'off',
+  :disk_size => '2048', :disk_format => 'VDI', :hostiocache => 'off',
   :os_type_id => 'Debian',
   :iso_file => "debian-wheezy-DI-b4-i386-netinst.iso",
   :iso_src => "http://cdimage.debian.org/cdimage/wheezy_di_beta4/i386/iso-cd/debian-wheezy-DI-b4-i386-netinst.iso",