FWIW Paradox,
My HP laptop comes with a restore disk instead of an install disc

that restores to the entire drive.
In order to set it up for dual boot, I use gparted to shrink the NTFS system partition from 80GB to about 7. WinXP, but still ntfs. I have never had a problem with this though I've only done it about 3 or 4 times.
There is a bootable cd with gparted called
SystemRescueCD, same one I've used without issue. As Caveman says, defrag defrag defrag. I've read that a fragmented drive can cause all sorts of headaches, though I've never had any (aside from the headache I get while biting my nails waiting for it to finish, which would happen regardless of what program I used

)
Obviously this requires console access. Personally, I wouldn't mess with a windows system drive unless I had console access.
YRMV, but I've never used, nor felt the need to aquire partition magic.
Frankly, I'm surprised anyone would only give 8GB to a windows system partition, with the size of updates and general windows bloat it just isn't enough anymore. If you are looking to free up space though, you can delete the uninstall files for the updates (some of which will be very old and you will NEVER uninstall.) C:\windows\system32\$NtUninstallKB* You'll need to set explorer to show you hidden and system files to see them. No need to delete all of them either. I usually delete anything older than a month or 2 (depending on how desperate for space I am.) A quick peak on a WinXP box nearby shows these files taking up 657MB.
If you just don't want to mess with the system drive, you could shrink the big partition, carve out a chunk and mount it as your home directory on your system drive. Depending on how much crap you keep in $HOME

that could be quite a bit of space freed up. And with that, I'll expect a chuckle from the NIX folks at MS' revolutionary new implementation of a god knows how old Unix method
