Partition Magic is long gone. Acronis works but is not free. Easeus is a Partition Magic clone and is free. As FOR says, there are many similar tools with varying features and user-friendliness. Easeus is pretty much idiot proof.
I'm not sitting at a suitable machine right now, but I'm sure you can shrink and stretch partitions, including the system partition, in Win 7 via its own Disk Manager.