Can I access my Windows partition from DamnSmall Linux
 

I have burned the version 5.0 of the DamnSmall Linux and I want to be able to access my Windows (XP) partition, what do I have to do?

PS. Could you please tell me the Root password for DamnSmall Linux?

Also: Can I save the configuration I made so that it will be able to resore my settings?

For accessing Win partition:mount it: mount /dev/[win disk] /mnt/a_folder

From the DSL FAQ: Use 'sudo su'

What part of the configuration?

I want to save all the changes I make every time I start my DamnSmall.
If this is not possible, can I save the internet connection settings (username, password etc...)

You can save user settings easily (including stuff like passwords) by copying the user directory (/home/[user]) somewhere else. However, system-wide settings (like the resolution) may be more complex.

I am thinking of installing the DamnSmall Linux to my hdd. If I do, will I be able to expand it's power by making modifications (installing a new kernel, installing an additional GUI like KDE or Gnome etc...)?

You can easily make modifications to it once it's on an hd. It's based on Debian, so you can get new stuff the same way you do on Debian, with apt-get. See the DSL FAQ.