The only problem with altering the size of the boot partition, ie C: , is that sometimes the recovery disc wont work as its looking for a partition of the size it was initially made from. So make an image of the drive once you have resized it and got the programs that you are going to use installed on it.
Windows 7s disk management seems a bit restricted so you are probably better off using a 3rd party program such as Simon has mentioned.
40 to 60 gig used to be a good size for XP, provided you make sure that everything downloaded is saved to a different partition or drive. Dont let stuff just download to where it wants which will usually be in the users folder of C, that can soon fill it up.
For Vista and windows 7 I tend to make the boot partition 80 to 100 gig as most PCs are coming with bigger and bigger drives and the OSs and programs tend to take up more room than earlier versions did when installed.
If you image the boot partition you only really need to back up any data, music and videos which are probably best done to an external hard drive which you can update whenever you like.