In WinXP, it's normally possible to resize a partition directly from "Disk Management".
You can find that by clicking with right mouse button on "My Computer", choosing "Manage" and
finally selecting "Disk Management".
I haven't tried it yet, but it should move the files to the beginning of the disk.
"defrag" just puts all fragments of a file together, by moving the fragments around on the disk.
It doesn't necessarily put everything in 1 consecutive block, ie at the beginning of the disk.
What do you mean by "bootable backup"? When installing a dualboot, a Linux bootloader (Grub or Lilo) is installed in your MBR. Normally, you can configure it to run either windows or linux. Most modern Linux installers know well how to create Linux partitions on the disk, configure the boot loader for you, etc. So the risk should be small.
Furthermore, restoring your windows boot loader should be possible from:
-your windows installation CD;
-a bootable Windows rescue disk (you can create one via: Start - Programs - Accessoires - System Tools - Backup, but I think it only works with floppy disks.
-You may want to try http://jsifaq.com
. It contains some very useful tips on how to tweak Windows for your needs. Maybe there's a tip on creating rescue disks too (ie on USB).
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