Its just as easy to put things on the other partition without changing anything.
All that must be done is when installing programs tell it to install on the other drive.
Only the program itself will be there all of the icons and registry settings will still be as they should be and you will never notice the difference.
Actually that would be a good place to put all documents, music etc so if you ever have to reload the op sys none of that stuff is affected.
Otherwise you can goto start|administrative tools|computer management|disk managment.
Right click on the on the box in the middle that is the drive you want to shrink and click shrink volume and make it smaller, then do the same to the other and expand.
If the xp disk has a green outline then it is the boot volume so you cant make it go away, only real small so the boot loder stays intact.