Just delete the line in boot.ini referencing
That should leave you with something like:-
multi(0)disk(0)rdisk(0)partition(2)\WINNT="Microso ft Windows 2000 Professional" /fastdetect
Check that you can reboot into Win2K. The delete all the unnecessary folders in the C: drive to reclaim the space but LEAVE ALL THE BOOT FILES that are not in any folders in the root of the C: drive.
Resize C: and D: using Partition Magic or BootIt-NG if you want to but dont delete or format the C: drive unless you want to go through a full repair of Win2K. It is possible to totally ablate the C: partition if you really want to but this is a bit more complicated and involves copying the boot files from C: to D: and writing a new partiton boot sector to the current D: partition.