That`s crazy, I got a 250g and 160g drives working as one partition here on S1 and 189g on an ide, all sp2 pcs ?!?!
As regards to the c: partition, I know u can resize partitions with PartitionMagic, and I know it`s know to retain the data in cases - I`d back important stuff up and try it out.
(sorry if I`m missing anything relevant from a pic, but my firewall`s blocked it)