Originally Posted by Bill MacDonald
Looks good so far. Try this in safe mode first. Go ahead and right click on the unallocated space and create your new volume. Assign a drive letter, format it as NTFS with the default allocation unit size and enter your new volume name. Quick format it if you want.
If this does not work and gives you the same problem as before, restart the process but create the new partition with the WD tools. Although it seems that you have done everything correctly and there seems to be no hardware issues, sometimes the tools provided by Vista just don't get it done due to unseen software or driver conflicts. Third party tools are usually more robust. They check for conflicts and handle them a bit better.