I'm currently using a browser in my virtual machine. My host machine (laptop) is connected to a VPN. I've just been prompted by a website to allow location services in order to use the site. Would the IP address sent be my VPNs? and since I'm using a VM would it send my actual wireless access points and what is the random client identifier? How compromised would I be by allowing the location service?
Geolocation does not "compromise" you. The peer will know your geographic location as offered by the browser API. IP address is not part of this, but then - providing the IP addresses is not that much of a problem anyway.
Depending on what the VPN was used for, providing the location can be a problem though. If the VPN was just used to protect yourself from a potentially malicious local network (public hotspot or otherwise shared WiFi network) or snoopy ISP than providing the location to a website is not a problem. If your intend was instead to hide your location from the website you visit, then giving access to the location is of course a problem.