How to extend partition size in linux(ubuntu 9.04)?

You can increase the size of the virtual machine's disk capacity with the command-line tools provided with VMWare:

/usr/bin/vmware-vdiskmanager -x 28GB /path/to/VM_Name.vmdk

replacing /path/to/VM_Name.vmdk with the path & name of your virtual disk file.

Then, increase the virtual disk with a GParted bootable ISO (boot from it with the VM).

Full guide found here.

Move /home and /swap to separate virtual disks (VMDKs). There's no reason to keep them on the same VMDK; virtual disks aren't a scarce resource!

This also gives you a bit more flexibility -- you can put /home and /swap on different storage, for example.

You will need to edit /etc/fstab to change the lines for /home and /swap to point at the new disks. If you look at /etc/fstab, you will see lines like

/dev/sda2     /home   ext3   (various options)
/dev/sda3     none    swap   (various options)

If you move /home to disk #2 and swap to disk #3, change /dev/sda2 to /dev/sdb1 and /dev/sda3 to /dev/sdc1.

Note that if you used LVM for your disks you would not have this problem; LVM logical volumes do not need to be contiguous on disk (or even on the same disk!)