just say yes let it "dismount" so windows can format it, as that's what you want. But i'd say label it first(carefully). so it's then clearer -to you- what you are formatting.
you'd have an issue booting if you formatted the active/bootable partition, but even that is easy to fix. Load the recovery console, do the command bootcfg /rebuild. it finds all win xp intallaions, makes a menu of them, menu stored in boot.ini on the bootable partition, with a few other things. You can change which partition is bootable eg with gparted live.
Changing the active partition from the xp recovery console (even in diskpart) may not be possible. 'cos its diskpart is reduced. Not as good as the one in the actual OS proper.
See this from wikipedia http://en.wikipedia.org/wiki/Diskpart
"On the Recovery Console, which is included in all Windows 2000, Windows XP and Windows Server 2003, there is a diskpart command which is significantly different from the one included in the actual operating system. It only provides functionality for adding and deleting partitions, but not for setting an active partition.[3] The utility is also provided in the Windows Recovery Environment, the successor of the original Recovery Console."
It's not really necessary to wonder why windows is asking you to dismount it. You think it's not in use. So what. It doesn't matter. Maybe Windows is storing System Volume Information like System Restore stuff on it.
You could open a cmd prompt run diskpart and find out which partition is the bootable one(windows calls that, "active").
D:\Documents and Settings\User>diskpart
Microsoft DiskPart version 5.1.3565
Copyright (C) 1999-2003 Microsoft Corporation. On computer: DELL-DT1
DISKPART> select disk
There is no disk selected.
DISKPART> list disk
Disk ### Status Size Free Dyn Gpt --------
---------- ------- ------- --- --- Disk 0 Online 233 GB 43 GB
DISKPART> select disk 0
Disk 0 is now the selected disk.
DISKPART> list partition
Partition ### Type Size Offset -------------
---------------- ------- ------- Partition 1 Primary 8 GB 1024 KB Partition 2 Primary 7999 MB 8 GB
Partition 3 Extended 192 GB 16 GB Partition 4
Logical 42 GB 16 GB Partition 5 Logical
32 GB 76 GB Partition 6 Logical 100 GB 109 GB
DISKPART> detail part
There is no partition selected. Please select a partition and try
again.
DISKPART> select partition
There is no partition selected.
DISKPART> select partition 1
Partition 1 is now the selected partition.
DISKPART> help
Microsoft DiskPart version 5.1.3565
.. {Googled how to get diskpart to show active partition!}
DISKPART> detail
Microsoft DiskPart version 5.1.3565
DISK - Print a list of volumes on the disk. PARTITION - Shows
details about the current partition. VOLUME - Print a list of
disks that contribute to the volume.
DISKPART> detail partition
Partition 1 Type : 0B Hidden: No Active: Yes
Volume ### Ltr Label Fs Type Size Status
Info ---------- --- ----------- ----- ---------- -------
- Volume 1 C DOS FAT32 Partition 8 GB Healthy System
DISKPART> detail partition 2
The arguments you specified for this command are not valid.
DISKPART> select partition 2
Partition 2 is now the selected partition.
DISKPART> detail partition 2
The arguments you specified for this command are not valid.
DISKPART> detail partition
Partition 2 Type : 0B Hidden: No Active: No
Volume ### Ltr Label Fs Type Size Status
Info ---------- --- ----------- ----- ---------- -------
- Volume 2 H Winsetup FAT32 Partition 7999 MB Healthy
DISKPART>
It is possible for your active partition to not be C. As my active partition is the first on the disk, and while this windows calls itself D, there's another partition from an old installation, which calls itself C, and that partition is not active.
The asterisk diskpart uses just marks the selected partition, not the active one.
Ignore the bullet points, that's just superuser converting * to asterisks.
If you manage to format your active partition, then you wouldn't be able to boot, but it's easily fixable.
also you can open a cmd prompt and do dir /a e:\boot.ini If it doesn't have that, it's not the active partition. If it does, then it could potentially be, and has been at one time. boot.ini stores the booting menu that lists your windows installations. If that is gone then you'll have trouble booting, but as mentioned in comment, even that's easy to fix just load the recovery console e.g. from cd.. and run bootcfg /rebuild. there are some other commands you can try. fixboot and fixmbr are the relevant others people try to fix problems booting.
Also, if you have more than one hard disk ten each might have an active partition, but the BIOS decides which hard disk is booted from. Then after that, whichever partition on that disk is active, is booted.
