You should be able to use partition magic with no main issues.

FYI:  to future readers:

Partition Magic 8.x is NOT made for servers (yet).

Diskpart will NOT extend a system partition.

Thanks for you input. 

Solution that worked for me:  (not the route I wanted to take)

1.  I ran the backup utility in Server 2003 backing up the "Program Files" and "System State".

2. Reinstalled Windows 2003 Server and resized the partion during the reinstall

3. Restored my Server via backup file to original state.

HTH

Windows 2003 also comes with a utility called diskpart, Here is the microsoft kb article on how to use diskpart

kb article # 325590

Ok ppls, you can resize Windows 2003 partitions using the following software:

Acronis Partition Expert 2003 or Acronis Disk Director Suite 9.0 or

Paragon Partition Manager Pro v6.01.321 will also do it.

I am sure that there are others out there, but I know the above ones do work.

Dave Lee.