When you install Windows 7 Ultimate, make sure you have at least 16 Gigs of free HDD space. Basically I am creating a typical developer machine.
When I used to have Windows XP SP3, I used to have 20 gigs of C:\ ( OS partition ). I followed the same pattern with Windows 7 also and had to spend a half day at least to resize the partition. Windows 7 took whooping 9.5 Gigs in my OS partition without any application install.
I am sure Microsoft will come up with lots of Kb and SP updates for all the software like Visual Studio, MS Office etc as people will start using Windows 7 in day to day life. So I wanted to make sure I have enough room on OS partition to accommodate all.
Again this is developer machine, so I need to install Visual Studio 2008 Team Suit ( Yes, I have one ), Management Studio, Office 2007, and other giants. I always want to make sure that the software I use most are present in my OS Partition. So according to my calculation now i need my OS partition to be at least 40 Gigs.
So now I started my search to find how to resize/extend OS partition. I gone through various options and succeeded at last.
1) Windows 7 built in Extend partition tool :
Start Menu –> Computer ( Right Click ) –> Manage –> Storage –> Disk Management –> Right click on the partition you want to extend, and you will get Menu as below :
I have tried a lot but was not able to get the Extend Volume enable. After a lot of research I understood why it is not enabled.
“You can add more space to existing primary partitions and logical drives by extending them into adjacent unallocated space on the same disk. To extend a basic volume, it must be raw or formatted with the NTFS file system. You can extend a logical drive within contiguous free space in the extended partition that contains it.”
It means that I need to have unallocated space adjacent to C:\ which I never had. So I took tough decision and backup my all data on drive D:\ and deleted it. But it shown me the reclaimed space as Free space and not Unallocated Space. I dont know whether it matters or not, but again I was not able to get Extend Volume enabled.
I have researched more and found this good article from Mark Ghazai. He has given a work around for this. In his own words :
You can only extend a partition if the unallocated space is immediately at the end of that partition, in this case having the unallocated space between C: and D: volumes will let you extend the C: volume.
Now, here is a solution I can think of right away;
1- Temporarily move all the Data from D: volume to someplace else
2- Change the D: drive letter to a different drive letter that is available on the system (for instance Z:)
3- Shrink Z: to whatever size that you’d like to add to C: volume.
4- Create a new volume out of the unallocated space that was taken from Z: and assign D: as the drive letter.
5- Delete Z: volume that will make it an unallocated partition between C: and D:
6- Extend the C: partition.
I tried all this sincerely but no luck. 
2) Partition Magic : After all above went failed, I decided to go with trusted companion Power Quest Partition Magic. ( Power quest is now overtaken by Symentec, but that is a different story ). I went all surprised and disappointed when I came to know that Symentac do not provide any working free trial version to evaluate Partition magic. Yes, Partition magic does not have any free evaluation or trial version. So I have to again go to Google and try my options.
3) Partition Wizard : A very good free tool. It gave me all the power I needed to perform partition resize on my C:\
It has two free editions
1. Home edition
2. Business edition ( Free to register )
I have downloaded Business edition and registered. It has lot of options and convenient GUI to perform all the operations I want to perform.
I successfully used it to perform a partition resize. 10 out of 10 to save my day and 69$ 