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If I do a partitioning for Linux that then is a permanent thing?
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No it is not a permanent thing. You shrink the Windows XP partition and leave one space for Linux to go into.
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The only way to undo it is to format and install win xp fresh?
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No you can remove the Linux partition and expand Windows XP to fill the whole space.
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Me being naive user, is it not possible to just resize them?
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Yes it is possible.
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Suppose Linux need three partitioned chunks of HDD.
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Generally one distro needs one chunk. It will put in its root, swap and home.
If you can watch a short video have a look at Dual-booting Windows and Linux the easy way (Linux.com videos)By Robin 'Roblimo' Miller on
http://www.linux.com/articles/114157, particularly Video 5. From memory the only thing he misses out is about fixing the MBR - Linux tends to load the Boot onto MBR but removing it is fairly simple.
I have found that the easiest way to dual boot a desktop is to have two hard drives - Windows goes on one and Linux on the other.
I have recently come across "Installing Ubuntu Or Fedora From A Windows Or Linux System With UNetbootin" at
http://www.howtoforge.com/unetbootin..._ubuntu_fedora. I have not had need to try this method, but it might be useful to you.