Caution PC techie rant below :)

Theres a valid technical reason why you can't partion some drives. Both XP and Vista.
It's hiding behind "software protection", but its mainly to force you to pay more later, many companies don't include a full copy of your O/S. They only include a recovery disc. 
The recovery disc calls data off a hidden partion on your HDD. But if you've removed it or your HDD is dead then the recovery will fail. 

Ok the sales guy was wrong here, and it's PR to say the customer is being dishonest. 
And yes at times Dell support is poor, but no worse than other big players.  

But it does sound from your description the techies are trying to save you from breaking your PC.  Also consider your service agreement - if you know something isn't covered why ask. I don't expect EF to teach me how to use Lightwave why I buy Poser :) 

Pinky - you left the lens cap of your mind on again.