@jconn5:
Here is an "overview" of how to do this. If you're not an advanced user, you'll need to research more or wait for other users to elaborate.
1) use Boot Camp Assistant to allocate the new space for Windows. Cancel the process after it completes.
2) on your current Windows installation, add an entry in c:\boot.ini that references the location of the boot camp partition you just created on your Mac. This allows you to boot windows from the new location after its moved. This is typically partition 3 on most Macs. Run "diskutil list" in Terminal on your Mac to isolate the new partition number Windows will boot from. then, add this line to boot.ini:
multi(0)disk(0)rdisk(0)partition(3)\WINDOWS="Windows XP Boot Camp" /noexecute=optin /fastdetect
3) run SysPrep in Windows to allow it to be cloned. This is complicated and beyond the scope of my answer, so research it well.
4) connect your hard drive that contains Windows to your Mac and use Disk Utility to create a backup image of the windows partition.
5) follow these steps (except for #1 which you already did) restore your Boot Camp partion from your backup image and make it bootable:
http://discussions.apple.com/thread.jspa?messageID=10835653