To partition, you're meant to start up from OSX cd (or os9) and from the drop-down menu, choose disk utility, then go to partition. It shouldn't worry about privileges there. As for modifying the System folder, I have no clue really but you can probably do it as root in the terminal if everything else fails.
Beware, partitioning up your drive is going to delete EVERYTHING on it. Not a spec of anything previously installed will be on it. If that is your only drive, make sure you have backed up EVERYTHING that is of any value to you. Including email settings, messages, as well as bookmarks/favorites from your browsers.
you also can not partition dirves that are inuse or have a system in it that you are booted off of. If its a second drive then you should beable to do anything to it you want... as long as you dont have anything using it... If you are you can do a ps -ef and kill any processes that are or just reboot. you can also use the umount command to unmount it if you have to force it... check it out in the man pages.
have you booted off a CD and tried it? That will let you do it nomatter what... but you will loose all you data.... as you know. I sugest that you boot off an OS 9 disk. OS X wont let you make the partition sizes anything you want like you can in OS 9.