From within Windows you cannot change the System partition C:
You can do this (with some risk) using a Partition Manager.
You would need to move everything off of D: to either E: or F: etc.
In order to merge partitions they need to be next to each other: C: > D:
If you choose to do this I'd suggest GParted as seen here:
GParted
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Anyway if you use GParted: Save this download:
http://downloads.sourceforge.net/gpa...2&big_mirror=0
This is an ISO file. You will need an ISO burning program to burn it. It cannot be burnt as data as it is an image.
If you use Nero there is an option called "Create Disk Image".
If you do not have Nero you can use this free program:
http://isorecorder.alexfeinman.com/isorecorder.htm
This will add the burning option to your right click options or shell.
With Nero just point it to the downloaded ISO. With the other recorder just right click the ISO and choose Burn Disk Image.
A new blank CD is required.
After the burn this CD will be a boot disk and will boot GParted.
Verify that your CD drive is set to boot prior to the hard drive and boot the CD.
There are some basic tutorials on the functions and use of GParted here:
http://gparted.sourceforge.net/documentation.php
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All that being said I would suggest adding a new hard drive into the system.
Then reinstall XP to the new drive and remove it from the old.
Either way let us know if we can help further.