So I try to creat the drive D. I apply the changes and then allow Drive Mapper to get everything in order for the drive letters. When Win starts I get the Drive Mapper dialog box. Next. It sais "search for references drive D and replace them with drive D (CD-ROM)" then I check and nothing. The drive C is in the same size and there is no partitition created. Please help me!!

i dont use partition magic, or any kind of partition tool since partition magic 7 completely hosed my windows partition years ago. and im not exactly a newbie at messing with computers!

i only recommend using fdisk to make partitions.
so if you dont want to risk your current C partition, i would get a 2nd harddisk if you want a D harddisk. thats my 2cents

With fdisk i should make a extended dos partition.right?I got Win98SE and a startup disk with the fdisk program

yep thats the one, although if you havent got any free space, you cant.
fdisk cant resize a current partition like those fancy (and dangerous!) programs

Be warned tough that using Fdisk is equal to reformating your HD. If you had in mind to keep the information on your HD safe (which is usually the reason why you would use Partition Magic first of all), better back up first.