Well the other day we were having a linux (fedora8) install fest.People were asked to make parttitons for install some people having vista had a problem that they couldnt shrink their partitions beyond a certain level despite having more memory.
This is due to windows placing paging files,hiberation files,shadow copies, system restore points, kernel debugger logs near the start and end of the partition put there deliberately in order to conserve space for the system.Well here is how to counter the problem…

1 ) Right click on Computer icon > properties>advanced sys settings>(Performance) settings>Advanced>Change

Now unselect the ” Automaticaly managing paging file size for all drives” or set to “no paging file” at the particular drive.

Press ok Restart computer. (Re enable after partitioning is complete.)

2) Use disk cleanup wizard to remove hibernation files and restore points.

In some cases shrinking size may still be same so procced to next steps.

3) Right click Computer icon > properties>System Protection>Deselect the drive you want to shrink press ok (Remember to turn this back on after resizing)

4) Right click Computer icon > properties>Startup and Recovery >Settings and then change the Write debugging information drop-down to “None” to disable the kernel memory dump.

5) Open cmd.exe by right clicking on it selecting “Run as Administrator” type powercfg /h off
This turns off hibernation.

6)Now check if the disk has more reducable space if no then restar and delete c:pagefile.sys or use disk cleanup again

7) If still no help use Gparted available in many linux distros or as live-cd

8) Now defragment disk using Auslogic Disk Defrag and then Diskeeper pro defragmenter.