I have a 2 part question regarding drive partitioning and backing up partitions.  

Situation: I have a PC with a single 400GB drive.  Its is formatted as
a Basic disk with a single primary partition.  Windows XP and all my
apps are installed on this.

Goal 1: I would like to create another paritition so that I have a
main 300GB partition, plus a second 100GM partition.  In the second
partition I would install a second copy of Windows XP.  I would like
to create this new partition without formatting and re-installing
everying on the primary partition.  Is this possible?  If I create a
new partition can I later delete it and go back to having a single
400GM partition, again without reinstalling everything?

Goal 2: I want to backup the entire C: partition periodically so that
I can go back to previous images whenever needed.  This means the OS
and all applications are backedup.  What is the best software for
creating an image or backing up a whole partition?  Can I create a
backup of the main C: partition, and save the backup file also to C:
drive, or do I have to save the image file to a different partition? 
I remember a couple of years ago that the software I used had the
limitation of not being able to save the backup file to the same
partition that was being backed-up.  Is this possible with other
software?

Thanks for your comments.

Thanks for your comment.  Unfortunately the tool from zeleps.com
doesn't work with NTFS.  I am using Windows XP with NTFS.
Cheers.

Have you looked at Partition Magic from PowerQuest (sadly now Symantec) ?

I use 'Acronics Partition Expert' for exactly what you intend doing
and it work fine all the time.

With Nero version 6, you can do a hard drive backup, however you must
have at least 10% free space on the hard drive you intend backing up.
After installing the Nero Software, choose 'Burn Hard drive backup'
from the 'Recorder' menu.

I hope these information helps.

Sorry, I meant to say 'Acronic Partition Expert'
http://www.brothersoft.com/Utilities_System_Utilities_Acronis_Partition_Expert_17030.html

Thank you very much for pointing me to Acronis.  After looking around
a bit more I decided to purchase the Disk Director and True Image
programs, which meet my needs well.  I've just used both and am very
happy with the products.  Very comfortable to use and do exactly what
they should.