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With Windows Vista, there is no need of any other third party application such as Partition Magic, Disk Director or any other Partition Manager. Windows now has the inbuilt partition manager which is very easy to use.

Shrinking Windows Vista Partitions or partitioning:
This allows you to create a new partition or shrink any existing partition. Follow these steps.
Step 1: The options are available at ‘Disk Management’.

Start Menu -> Control Panel -> System and Maintenance -> Administrative Tools -> Double Click Computer Management -> Storage -> Disk Management.

It should look like the image below.

Step 2: Now, right click the partition you want to shrink and select the shrink option.

Step 3: In the pop-up box, Enter the amount you want to shrink the partition by (By default, the maximum is entered).

Step 4: Click Shrink and That’s it! Now you have a new partition to use. You can then right click the new partition and format it the way you want it.

You will get a new partition which is listed as unallocated as above. You can use that to create a new partition (right click and format) or use it to extend with already existing partition (Read extending windows vista partitions).

In case you are not extending and saving it as a new partition then, follow these steps.

Extending Windows Vista Partitions:
This allows you to extend a partition or merge two partitions. Follow these steps.
Step 1: The options are available at ‘Disk Management’.
Start Menu -> Control Panel -> System and Maintenance -> Administrative Tools -> Double Click Computer Management -> Storage -> Disk Management.
Step 2: Now, right click the partition you want to extend and select the extend option.
Step 3: Click Next in the Extend Volume Wizard.

Step 4: It will list all the free space available (unallocated partition) that you can add to the particular partition that you want to extend. If you don’t have any unallocated partition, see above to check how to shrink a partition to get unallocated space.
Step 5: Select the amount of amount of space that you want to extend in by.

Step 6: Click Next and Confirm and Finish. That’s it! You have extended the partition.

Notes from my experience: Both shrinking and extending was very fast. Formatting takes couple of minutes depending on how big the volume is. I shrunk my 110GB C drive in my HP Pavilion Entertainment PC to 60GB as it doesn’t allow to shrink below that and created that unallocated space to create a new partition.

If you are facing long time delay in shrinking, then it might be because of the disk is fragmented. For example, if you have a 60GB drive and you already have 45GB of data in that. These data upon daily usage after weeks, it would have evenly spread across the whole 60GB space. Now if you try to shrink that drive to 50GB and try to get 10GB unallocated space, then disk management has to find empty space between files in the 50GB space and relocate the files from the 10GB space. This is what is usually done in defragmentation and I would suggest doing that on regular basis as it improves file reading speed.

And another of my suggestion is to use NTFS. Read on to find why NTFS is better than FAT and how to convert FAT to NTFS.

Read this post, if you want to change the drive letter in Windows Vista after partitioning.