partitioning - Someone from Microsoft told me you can always shrink down the partition the most it can, is that true?

Someone from Microsoft told me today that you can always shrink down a partition to the most it can (Update: by using the Win7 or Vista disk management tool) -- for example, when there are 120GB of free space on C:, then you can for sure shrink it by 120GB. Is that true? My experience is that you cannot. Maybe the way he used his computer, he told me he could always shrink down whatever that's available.

(for example, if he never made the partition full and then delete many files from it to gain back lots of space.)

Update: my experience had been this -- if you fill a 250GB hard drive to 100% full, and then delete many big files from it to gain back 80GB, then often you cannot shrink the partition by 80GB. You can maybe shrink it by 20GB, because it needs to shrink using contiguous free space. (by the Win7 or Vista disk management tool)

Answer

No, this is incorrect : You can only shrink a partition until some file at the end of the partition blocks you.

For example, if a file occupies sector number x, then you can only shrink the partition down to x sectors, no matter even if all the sectors below x are free.

You can use defragmentation software to move some of the files allocated at the end toward the begining of the partition.

However, if the partition in question is the system, Windows has unmovable system files that it likes to allocate at the end of the partition. Such files will block any attempt to shrink the partition, so that the only way left to shrink will be to reinstall Windows.

For example, here is the analyze of my disk C by Smart Defrag.
The black rectangles denote unmovable system files: