Not having had much to do with XP's Windows management system, I can't really comment on that, but Partition Magic is a different kettle of fish!! I've used Partition Magic since about version 3.0, (it's at 7.0 at the moment) P.M. is what it says, a partition tool. It will resize, delete, move in fact do virtually anything you can imagine with a partition. It not only handles familiar filesystems like fat 16 / fat 32 but also linux / unix and i'm sure others as well.
Best thing since sliced bread.
BE WARNED tread warily! if used carelessly it can mean a complete low-level!!!
Partition Magic allows you to do many things you cannot do without a 3rd party tool, and all of them non-destructively (vs. Windows limitations). As for it screwing things up, I've never seen that happen - HOWEVER - I have seen users screw things up beyond repair with PM (no offense catch23). As with any disk manipulating utility, you must be very careful to understand what you are doing and follow all directions to the letter.
As it stands both are user driven...both can screw the computer up, main difference is partition magic can load before windows to do some things, can do some other things non-destructively, and alot of the good features of fdisk are command line driven which is daunting for alot of users.
No it's a really good thing. You DON'T want to remove/move/resize/do-whatever-to a partition that someone is trying to read or write to at the same time. That could screw things up pretty bad. If P.M can do it it's probably because it "turns the partition off" before doing anything.
PM 7 works great , I have used it many times, however there was once that I had a problem and it distroyed all the data on my drive when I went to resize the 2 partitions. Luckily I had just made a backup with Drive Image a few days before but be warned, problems can happen so always backup you important data.