Windows 7: Using System Image to replace 750GB Drive with s 500GB Drive

BACKGROUND
My 750gb hard disk is failing on a HP laptop that came preloaded with Windows 7 home prem. I have a SMALLER excellent 500gb, 7200 rpm hard disk that I'd like to replace the failing hard disk with. I've read that my Windows 7 System Repair DVD will not restore my recent system image (on NAS) to a smaller partition. The C: partition on the failing drive is well over 600gb but can shrink to 300gb.
QUESTION
Can I restore a system image from my larger drive "as is". If not, and I shrink my C:\ partition (contain windows) to say 350GB will I be able to restore the system image to where windows will boot?

I have an old copy of (7.0) partition magic that I used to resize partitions on XP machines Can this old 32 bit partition magic safely resize my C: partition. If so, and I create a new system image can I restore it to the new disk?

Please help. Thank you.

Download Macrium reflect free home edition, make a restore CD, and either backup an image or clone the drive directly. I haven't used their clone facility but have used their image backups dozens of times and it is good and fast.

Otherwise, with windows backup, you will need to defragment the partition, then shrink the partition, then defragment and shrink.... until you get a < 500 GB partition.

As far as I know, Macrium Reflect won't let you "clone" one drive to a smaller one, but if you shrink your partitions first (as it appears you are going to do), then you should be able to do the cloning without problems.

Don't use Partition Magic to resize partitions.

Use Windows Disk Management or Partition Wizard.

Windows Disk Management works well within its capabilities, but may not let you shrink as much as you would like---in which case use Partition Wizard.

I'm not sure Macrium will let you restore a 600 GB partition to a 500 GB drive. You may have to shrink regardless of the app you intend to use.

EaseUs can do that with a pretty easy wizard, and the OS will work fine afterwards without doing Sysprep (as long as the hdd is in the same computer anyway). It's free for home use and worked fine countless times for me.

Of course if you have more than 500 GB of data in the failing drive, there is no way any software can do it. Move away stuff and then do the above.

No and Yes respectively.