In a VM there's little benefit to having a dynamic disk. Officially you can't convert Dynamic to Basic without wiping the disk, however using a hex editor you can change it back, keeping the file structure in place. http://www.wilderssecurity.com/showthread.php?t=191006
details how you can do this. I used this successfully on 3 VM's that were file servers.
I would strongly recommend
making a full copy of the VHD first or verify your backup.