First, thanks to Jaye, Francois, Ralk, and Micha for the helpful suggestions. Following the suggestions, this is what I did:
1. I read some reviews about Partition Magic on amazon.com and found that it worked for some and not for others. So I decided not to spend the $70.
2. I tried qtparted from the Knoppix 3.2 CD. It doesn't give you an option to defragment, only to define the new partitions.
I decided to wipe the hard drive and do a clean install of windows xp from the system restore CDs (set of 4) that came with the laptop. This distribution of xp formats the entire drive, and re-installs everything to the factory settings. After the reinstall I "analyzed" the disk using windows disk defragmenter, and was pleasantly surprised to see that it had kept everything in the first 12G of the 40G space. Then I booted with the Knoppix 3.2 CD, and tried to resize using ntfsresize. First time around it reported of cluster errors. I went back to windows, scheduled chkdsk at boot time. Another boot into windows fixed the errors. Then I booted with the Knoppix CD again, and successfully used ntfsresize to shrink the windows partition to 18G. Following the resize, I booted windows again, and it works fine.
Now, onto the fun stuff..... Though I have a lot of reading to do on patching kernel to support the hardware on this laptop.
Thanks again, all.
----- Bilal
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