Partitioning the Hard Drive

I recently had a new computer put together. I was advised to partition the hard drive into different sections and have a couple more drives. That way there wouldn't be so much room to search for data and it can be more organized. I have a 120 GB hard drive and wanted to make three 40 GB drives or maybe two 60 GB. How do I do this? Could someone explain how this is done? (I haven't installed an operating system just yet, but I will soon.)
Side-Note: slightly off the topic, but I don't want to start a whole new post just to ask this. I am waiting on a copy of Windows XP. I don't have the disc just yet, but I have the CD key. Can I use another disc or would it not work with any other disc?
Thank you for your time.

If you have a legitimate cd key it should work on any disk, as long as its the same XP type. So far instance, if you have an XP Pro serial key it won't work for an XP Home disk.
Now, during the XP setup you can create multiple partitions very easily, or you can create the installation partition during XP install, and set the partition to be smaller than the drive. When you get into Windows, the unpartitioned space will show up as an extra drive, which you can then format using the Disk Management area in the Computer Management control panel applet.

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