Use Norton Ghost and boot up use this disc. Save an image of your drive and then put the new image on your larger drive. Bingo
I was always under the impression that it was better to do a back image in Dos rather in Windows. Same thing for flashing your bios.
Windows Backup and Restore uses VSS, actually most good imaging programs use VSS now. Volume Shadow Services (VSS), enables you to backup files that are currently in use without having to reboot the server or boot the server into PE mode. Windows PE is better for imaging, DOS is better for BIOS flashing unless it is an EFI BIOS.