It is possible to shink the partition at its lower end. I think the best way to do this is to boot from some kind of LiveCD (I use KNOPPIX), which has all required tools available. If your root partition is formated with reiserfs, you'll need to use resize_reiserfs and any type of partitioner (I use cfdisk). Read the manpage of resize_reiserfs for more information on the procedure.
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