You will need third a third party repartitioning tool to do this. Windows XP
built in partitioning tool will not allow you to shrink an existing
partition, and create another partition in the unallocated space. To create
additional partitions you would need to boot the computer with the XP CD,
access the Recovery Console, delete all existing partitions, and then create
new partitions. Of course this will lose all data that was on the drive in
the first place.

There are several repartitiong tools one can use for this. These programs
will enable you to shrink an existing partition and create new partitions in
the free space without data loss. I use Acronis DiskDirector for it's speed,
simplicity, stability and ease of use www.acronis.com There other good
programs like Partition Commander or the lower cost BootIt NG which is very
stable, has great tech support but is more difficult to use.