Boot Camp Will Not Allow Me To Partition

Model Name: MacBook
Processor Name: Intel Core 2 Duo
Hi. I am trying to Install Windows XP Home Edition on my Macbook using Bootcamp Assistant and when I get to the Partitioning Stage it comes up with a box saying, "The disk cannot be partitioned because some files cannot be moved. Back up the disk and use Disk Utility to format it as a single Mac OS Extended (Journaled) volume. Restore your information to the disk and try using Boot Camp Assistant again." I do not know what this means and please help me to guide myself through this. Thankyou.

That error is telling you that your hard drive does not have enough contiguous free space in order to create a partition. You have two choices to correct it:

1. Erase the hard drive, reinstall OS X, restore from backup. (Using Time Machine.)

2. Try using a defragmentation program to consolidate the free space on the drive. iDefrag ($29.95)

Thank you sooo much but for the time machine it says i need a backup disc or backup something. What exactly is that? Can I use a flash drive or how does that work?

It's best to use an external hard drive for a Time Machine backup. A flash drive will most likely be too small and flash drives are usually formatted as FAT-32 or FAT-16. Time Machine will only backup to a drive formatted to the Mac OS X standard: HFS Extended Journaled.

Newegg.com - cirago 80GB USB 2.0 External Hard Drive CST1080
would this work? is it compatible for macs?

Yes, it will work but it's rather small to be using for Time Machine backups.

You didn't say how large your internal hard drive is, but you should use a drive as least as large as the one in your machine.