You can, but it is a very very bad Idea. Unless the D drive is a seperate hard disk drive (HDD). If it is just a partition, and the drive fails you will lose all backups on the D Partition. Most likely the D partition is small (10GB), and is solely for the recovery partion factory Image.
In your case it is 8GB in size, and It is not recommended to store anything else in there. Delete it if you want, repartition the HDD, create a "data" drive and store the Paragon Image. But keep in mind, if the drive fails, is corrupted, etc., you may lose all the data on the entire drive.
Vista also includes a file backup Utility-but it will not allow backups to partitions on the same HDD as the source.
Now you can modify the partitions, but by doing so you will prevent the recovery image (if you keep it) from being used, as the Main O/S drive will then be smaller that the image, and any recovery will fail.
Partitioner (bootable) must be burned to cd/dvd: Paragon Partitioner BURNCDCC
Free drive imaging software: Free Drive Backup Express - disk backup software