1) VMWare Workstation 8 doesn't support Win 8 directly, so you may need some small tricks:
To keep it possible, I will note only two key steps:
a) Choose "I will install the operating system later."
b) Choose "Microsoft Windows" > "Windows 7".
Recomendations for better performance: Set the memory = about 1/2 of physical memory. Consider enabling Virtulaization in host BIOS.
2) If you didn't allocate enough space for the VM, use Windows's DiskPart to extend the partition.
a) VM Settings > Hard Disk > Utilities > Extend...
b) In CMD prompt, C:\diskpart
DISKPART> list volume
DISKPART> select volume 2
Check the space avaliable in C:\ drive.
Refer to "Extending partitions in Windows using DiskPart (1007266)" for details.