Why would anyone start futzing with their PC if the machine is working OK? Two reasons: to make it safer and to make it faster. Dividing your hard drive into multiple partitions accomplishes both. By separating your applications and data from Windows' system files, you speed your backups and protect your files and programs from being wiped out if Windows conks out.
Windows Vista lets you create new partitions (which it calls "volumes") quickly and simply via the Disk Management utility. Unfortunately, the only quick and simple way to partition a hard drive in XP is to use a third-party partitioning program such as Symantec's $70 Norton PartitionMagic or Acronis's $50 Disk Director. A free alternative is Andy McLaughlin's Partition Logic.
To create new drive volumes in Vista, press the Windows key, type diskmgmt.msc, and press Enter to open the Disk management utility. Right-click one of the existing volumes and choose Shrink Volume. A window opens showing the amount of space in the volume, and the amount available for a new partition. The next field in the dialog box lets you choose how much space to allot to the new volume. The last field indicates the size of the original volume after the shrink.
After you select the volume size, click Shrink. Now right-click the new volume and choose New Simple Volume. Step through the wizard to select the volume size and its drive-letter designation, which Vista assigns automatically based on the letters currently being used. If you expect to add new storage devices, select a letter further down the alphabet to avoid potential conflicts in the future. You'll also select the file system to use (I recommend NTFS, unless you want to use the volume for older apps), and give it a name.
When you've made your selections, you'll see a summary of your choices. If you're happy with them, click Finish to begin formatting the volume. When the formatting is complete, an Explorer window will open with the volume selected. Relocate your favorite programs and data files to this volume, and set your backup program to duplicate this volume rather than the main (likely C:) drive, which holds all of your system files, which change much less frequently. Of course, you'll still want to back up your entire system three or four times a year--or more or less frequently, depending on how much confidence you have in your PC's stability.
A note on repartitioning XP
I have an ancient laptop whose battery gave up the ghost months ago, so it works only when plugged in. For no apparent reason, I decided to repartition the machine's drive following Microsoft's instructions for doing so in Windows XP, which entails a complete reinstallation of the operating system. I'm happy to report that I succeeded in creating two 15GB partitions on the notebook's 30GB drive during the reinstallation, and the machine is working relatively well.
All it took was about six hours of my time: about an hour for the initial OS installation, and five more to download and install the 100 or so updates XP required. I counted eight restarts during the process: every time I thought I was done and returned to the Windows Update site just to make sure, I was hit with more "required" updates (getting IE7 on the system took about an hour and a couple of restarts all by itself). Much easier to go with a third-party disk-partitioning utility, I think, but an interesting academic exercise just the same.
Tomorrow: Convert a Word document into a Powerpoint presentation.