Discussion on:

'NEW PARTITION' is greyed out

I have 250 GB HDD but only 80GB is allocated. Now when I right click on unallocated space in Disk Management in Win XP 'new partition' shows greyed..
how to go about it??

What is the Service Pack you have installed? There may be limitations to the partition size depending on the Service Pack. Install the latest Service Pack. And then partition the rest.
OR May be there are BIOS restriction and you may to update the BIOS.
And like to Ask which file system you used while formatting/installing XP - FAT32 or NTFS?

I think you need to allocate the new partition again. You can try partition software to resize and move it. There're many utilities really working well. I share it with you that I found this useful software here http://www.magic-partition.com/?8