Some notes:

OK your actual drive C: is over 100g and you allocate 5g for drive C:. that ten percent rule might be hammering you - it's been with MS since w3.1 and as far as I know is valid even for XP and will be in Vista . At this point I'd follow what Vile said.  A ghost to a new hard drive Via Norton.     

When you  reformat your HD this time I'd give drive C: at least 20 percent + the ten or so gigs XP demands for itself  and keep at lest 10 percent of the actual drive C: free for things like defrag,system restore and chkdisk. Virtual drives can be tricky.  In the old days they were necessary to get the mosty out of a large hard drive with w95 etc but now on XP I can't really see any reason to sport them - but that's up to you. Another thing check your hard drive to se it isn't one of those sata drives. They are nice in terms of access times but from what I hear loads of problems. Norton,  MS Word or Acessories in program files can give you a good look at your "system info"..