Thanks again Chief. Yes, I unhid all the system files.
Then I found a good article at http://superuser.com/questions/88131/
titled "How to shrink Windows 7 boot partition with unmovable files." I followed this, then finally, Windows wouldn't start. I used a linux CD to run live Ubuntu, then GPartEd to shrink my partition. Dead easy!. Then repaired my Win 7 install from my Win7 DVD which came with the computer. No issues here, either.
I'm a bit disappointed that I couldn't use the Windows tools to do the job, but then it has given me a good example of what Linux can do, which is what I want to try anyway. Overall, I'm happy.