Well I had some more success and failure.
Originally I had 3 partitions. I deleted the 3rd and as stated above and eventually was able to enlarge the 2nd partition to fill the remaining space.
I attempted to split the 1st partition which was 230GB full, 8 GB empty. By default, it split the partition into two equal halves. According to the Help it should have created the first partition according to the size used, so 230/8. I didn't want to experiment so I didn't try to apply. (Actually I may have tried it at one point and it gave the not supported error.)
At this point I deleted the 2nd partition and tried to enlarge the 1st to be a single partition covering the whole drive. I got the usual error. I then tried to add back the 2nd partition and Disk Utility hung on "Modifying partition map". I let it go for 1/2 hour and then quite Disk Utility which warned me the disk would be messed up. When I relaunched the second partition wasn't valid, but I was able to format it successfully. I chalk up this error to Firewire problems more than a fault with Disk Utility.
Anyway, at this point I reformatted the whole drive with GUID partition scheme. I was then able to manipulate the partitions as advertised. Splitting, removing, enlarging, etc. Of course there was no data on the drive, but it appeared to only erase the correct volumes. Also of note, the original Apple Partition Formatting had OS 9 drivers installed, after switching to GUID it did not (I didn't even see that option when making it GUID).
So, long story short, I'm guessing the new live resizing might only work with GUID. Or maybe it just had an easier time since the drive is now empty. (I'm on an Intel iMac).