"Is Windows XP using all that space for swap file, and leaving no more space for other uses?!"

You can specifically set the min/max sizes for the swap file... this has been a feature of Windows for a long, long time. It is very easy then to know exactly what space windows is using for it's own purposes.

Splitting a drive into partitions is certainly something experience will help with, but it is worth noting that partition sizes can be changed (carefully!) after the fact if need be.

Certainly, it is no more dangerous than mixing your data and OS on the same partition - what a nightmare.