How do I get around HD "issues" to update from 10.5.8 to 10.6.8?

This is in reference to my Macbook 2.16 while attempting to update from 10.5.8 to 10.6.8-- current usage on the Mac partition is 99GB with 33GB free; the Bootcamp partition is 31GB used with 70GB free. I own Paragon Camptune and was considering reducing the size of the bootcamp partition (it can dynamically change partition size). Total HD size is 250GB.

When inserting the disk it showed both partitions and indicated that the Mac "could not be used as a startup disk"; bootcamp simply said it could not without re-initializing-- which makes sense as it is NTFS.

I had naively thought that I could update without changing the bootcamp partition. It has several apps that I do not have original install discs for (they were downloads and are several years old).

It gets down to 2 questions: what should I use to backup the bootcamp/XP partition (and can it be cloned and installed on a different size partition)?

And #2-- why would the installer say the Mac partition "could not be used as a startup disc"? There is enough free space for the installation (>5GB) and I am running 2GB RAM-- the max for this computer.

Rich