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you can't format the drive you're currently using for your OS. In other words, C:\ can never be formatted from your windows (if windows is installed in C:) because it's in use.. imagine you format it, then what will happen to windows, where will it be run from...
That's why you need to boot from the cd or a floppy disk, so you can format it while the operating system runs from a different media (cd-rom or floppy disk).
If you have multiple drives (C:\, D:\, E:\...), you can format those other drives without problems from your windows.. just open 'My computer', then RIGHT CLICK on the drive to format, and choose 'Format'.
If you want to repartition, maybe try Symantec's PartitionMagic.