The only thing Gparted could help is to shrink the actual xp partition to make room for the new vista system partition.
This can be done rather easily, but nothing is 100% sure in partitioning work. Many things could cause problems, one of the biggest it power or hardware failure. That's why we recommend a backup of important data previously. Disable virtual memory function (swap) as well as other running programs like antivirus, online compressing software. Running "chkdsk /f" and doing a partition defrag could help too, even not necessary.
Please, read carefully the documentation
http://gparted.sourceforge.net/documentation.php
(there is a special chapter for ntfs resizing too).
But, I couldn't give any advice on the dual boot XP/vista setup. It is better to find information on specific windows help forums (unless other members know better this issue). I just would like to point a few things related to this issue:
1. It is possible to multiple boot with 2 or even more windows versions. You have to check if you need just an upgrade vista version or a new install one.
2. There is an 64-bit version for XP too, that could solve the problem of the RAM "barrier". In fact, a 32 bit operating system normally would see 4GiB RAM (or almost 4GiB), but they often are artificially bound to lesser RAM amount, I guess for commercial reasons. Various "home" versions of the windows operating systems were bound up to 2 or 3GiB ("professional" versions needed to go further). Analysts however thought it wasn't so big problem, as a home user would never need more than 3GiB RAM (no big applications, databases,CAD systems etc.)
3. A 64-bit vista operating system needs absolutely 64-bit drivers too, to work. 32-bit drivers can't be used, same for most XP drivers. So, check carefully that *any* part of your hardware is supported in 64-bit. Take care, this is not obvious.
4. The crucial point for games is the graphics adapter, not the RAM amount. Most games don't even have 64bit versions, because the 64bit market is very small in number (mainly professional and corporate systems, where games are left out 
). Running a 32bit application on a 64bit processor doesn't make it run like a 64bit native application (it could be better on an amd than intel processor, but i don't know many details). I think it would be better to boost your graphics card rather than paying for vista.
5. Not all computers are really vista compatible, even if they were marked "vista ready". I read these days about this issue: vista ready meant ready just for the very basic interface, *not* for the more advanced interface and graphics. This is not a RAM or graphics card issue, but a chipset issue: the 915 chipset from intel (very widely used in computers) wasn't compatible with "aero".
You need to be sure that your computer (especially the chipset) supports fully 64-bit vista. It isn't fiction that vista didn't satisfy big number of customers.
/EDIT/
Reading another time your post, I have to precise that C isn't a disk drive but a partition on one of the hard drives (the first one, I guess). With vista, another partition will be added. There are perhaps other "hidden" partitions on the drive, as some computer manufacturers used to do (Dell, HP/Compaq ... )
*** It is highly recommended to backup any important files before doing resize/move operations. ***