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...from a Windows 7 perspective. Unfortunately, the Windows XP version of Disk Management does not have a Shrink Volume capability.

If you are using Windows XP and need to repartition your existing drive, you will need to use something like EaseUS Partition Master Home Edition:

http://download.cnet.com/EaseUS-Partition-Master-Home-Edition/3000-2248_4-10863346.html