How to Shrink and Create a Partition with Disk Management in Vista

Information
It is possible in Vista to repartition your hard disk by using the
Shrink feature in Disk Management. You can shrink an existing partition (volume) to create unallocated disk space, from which you can
Create a new partition (volume). For more information, see:
Windows Help and How-to: Partition and
Understanding Disk Partitioning 
Warning
You will not lose any data on the partition (volume) that you are shrinking. You must be logged on as an administrator to perform these steps.

Tip
The default location for Disk Management is C:\Windows\System32\diskmgmt.msc.
EXAMPLE: Before and After with a New Partition Volume
STEP ONE
To Shrink a Partition
1. Open the Control Panel. (Classic View)
A) Click on the Administrative Tools icon.
B) Click on Computer Management.
2. Click on
Continue in the UAC prompt.
3. In the left pane, click on
Disk Management under
Storage. (See screenshot below step 4)
4. Right click on the volume (
EX: C:\ ) your want to shrink and click on
Shrink Volume.
5. You will now see this for a moment. (See screenshot below)
NOTE: It is verifying that there is enough free space on the disk to create a new partition.6. Enter the amount of space in MB (1024 MB = 1 GB) to shrink by, from the available free space on this volume, for the new partition and click
Shrink. (See screenshot below)
NOTE: The value in the Total Size Before Shrink box indicates the current size of the partition and the value in the Size of Available Shrink Space indicates the maximum size that you can allocate to the new second partition. 
Warning
The
size of the available space can be restricted by the amount of space currently allocated to on the hard drive for the
virtual memory page file,
System Restore max size, and
hibernation files. The location of the files on the hard drive plays a big part here because these files are marked as
unmovable, and Disk Management is unable to relocate them. As such, if these unmovable files are located in the middle of the total amount of free space on the disk, then only the amount of free space on the other side (to the right) of these files will actually be available for the new partition. This will result in you showing that you have x amount of free space, but not being able to use it for your partition. The only way around this is to use a 3rd party hard drive partition management program, or setup the partition when installing Vista.
If you wish to force the partition to shrink, then see:
the How-To Geek: Working Around Windows Vista's "Shrink Volume" Inadequacy Problems 7. After a few minutes, you will see the new unallocated (unformated) partition. (See screenshot below)
STEP TWO
To Create a New Partition from Unallocated Space
8. Right click on the
new Unallocated partition and click on
New Simple Volume. (See screenshot below)
9. The New Simple Volume Wizard will now appear. Just click on
Next. (See screenshot below)
NOTE: This wizard will make the new unallocated partition usable when finished.10. Enter the volume size you want for the new partition and click
Next. (See screenshot below)
NOTE: Unless you are going to shrink this new partition, you should use the Maximum disk space in MB.11. Dot
Assign the following drive letter. (See screenshot below)
A) Select a drive letter for the new partition.
B) Click on Next.
12. Dot
Format this volume using the following settings. (See screenshot below)
NOTE: This may take a while to format the new partition volume.A) Enter a name for the new partition under Volume label.
B) To save time, check Perform a quick format.
C) Click on Next.
13. Click on
Finish when the Succesfully Completed window pops up. (See screenshot below)
14. You will now see the Disk Management console with the new partition volume ready to be used. (See screenshot below)
15. Close Computer Management.
16. Click on
Computer in the Start Menu and see your new partition volume. (See screenshot below)
That's it,
Shawn