You want to change of running Windows 7 directly with Ubuntu running in a Wubi container to running Ubuntu directly with Windows 7 running in a VM. The more straighforward and safe way is a backup, format and reinstall, as in richzilla answer. The more convoluted way is to make space, install linux, create a new VM for Windows, and migrate all your data.
The problem is that windows can't reduce the partition size because some files (probably ntfs own metadata) are in the way. You can't move data when it is in use. Ubuntu can't modify the partition when booted from wubi as Ubuntu itfself is using the filesystem.
The best way is to use a liveCD with gparted to reduce the partition size. It will move the data, and create new partitions as needed. It's very important to have a recent and verified backup of all your data. Remember that your wubi container is also in that filesystem.
Then you could do a new install of Ubuntu, move all your data out of the wubi container and uninstall wubi, freeing that space . W7 would be accesible by dual boot. If that is an aceptable outcome you can stop there, and probably should.
There are tools to convert a Windows install into a VHD container but it is designed to run in MS Virtual PC, Virtualbox can run a machine using a VHD but the change in simulated hardware means that windows will most probably not work. The best bet is a new install and migrating the windows data.