"Now it is time to choose a partition. The first partition on the first disk is best. You can also create and resize partitions here. You have the option to name the drive, you should always name your drives. (I use names like OS, XP, DOCS, GHOST, MP3, etc) If you create or resize partitions BE CAREFUL, you will destroy data on other partitions if you do this. On a computer with a single hard drive I usually use a partition of around 6gb for Windows XP. I install the applications on the same drive and I use a backup program. It makes things easier. If you desire the utmost speed and efficiency, put Windows XP and the applications on a drive by itself with no other partitions. Given the size of hard drives these days this may be expensive and/or impractical. Format this partition using NTFS. This will take a while. Some people have asked "I've heard that FAT32 is faster, why use NTFS?" First NTFS is only about 1-2% slower than FAT32 and only on drives/volumes 32GB in size or smaller. It is faster because of the overhead created by the security of NTFS. Second, you can eliminate the majority of that overhead by following my tweak guide. Third, the aforementioned security is exactly why you should use NTFS!"
from
http://www.tweakhound.com/xp/installxp/installXP1.htm
google is your friend
edit: if you want to partition BEFORE formating and stuff your best bet would be to go with a program like partition magic.
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