Removing one partition on dual-boot system - Implications?

I can confirm that cloning XP to other partitions or hard drives is perfectly possible as I have done it many times. As surferdude2 said the boot.ini file may need to be edited to reflect the number of the new partition that the clone is on, and in your situation masonite you may also need to do a fixboot from the Recovery Console. The ntloader won’t natively run from a logical partition, so if this is what you have you will need to convert to a Primary, (or do a bootsector edit on the logical to allow the ntloader to operate from there).

If however you were to just move the ntloader files from C: to D: and then resize D: to the start of the hard drive, you would not need to edit the boot.ini file, even though the XP partition was physically the first partition on the hard drive. The ntloader takes its numbering from the order the partitions were created and not their physical position. MBRWIZ has an option to resort partition numbering.

The other problem you may have is if your XP has current allocated itself as the D: drive. I’ve never tried what you want to do, but I do know that when XP is anything other than the C: drive it is much more touchy about being cloned.