Perhaps you should consider making a second (or even a third) partition on
the internal hard drive, instead of simply making one big C:\ drive?
This can be done from with XP by its disk management tool. If you point the
mouse at the unallocated space and right-click, one of the options is to
make a new partition.
Note that separating your personal data from XP and programs is often a good
idea, since you can then use different backup strategies for XP+programs vs
your data. Personal data can be copied using Windows Explorer or the
command line tool XCOPY. XP itself and programs need to be backed-up with
specialized software, such as Norton GHOST or Acronis True Image. Other
backup/restore options can be found at:
http://www.majorgeeks.com/downloads3.html
But, if you really want to make C:\ larger, then a third-party program like
Partition Magic is the way to go. However, it is unclear whether that old
program (formerly by PowerQuest, now by Symantec/Norton) can handle a disk
as large as you have. I have version 8.01 and its help says "Support for
partitions up to 160 GB, containing up to 145 GB of data." But, other
programs, such as Acronis Disk Director and Easeus Partition Manager, can
handle 1T disks.
Finally, are you sure that the controller on your motherboard can handle a
disk that large? Just because it seems to function when you are writing to
the first 128 Gig does not mean that it will work on the last bit of the
1000 Gig. Try some web searches, or contact the PC maker (or motherboard
maker). I am sensitive to controller limitations, since I recently upgraded
an circa 2003 PC from 120 Gig to 500 Gig. I also added an eSATA-PCI card.
(Much faster than USB2!) While doing research on what card to get I found
information that many add-in cards were limited to 1T, and some could not
even handle that.