Hi elect_son.
First the easy one. Yes, you can have a 250GB partition/volume in XP. But why would you want to ? You would be much better off creating a 20GB partition just for the OS (C

and then making 1, 2 or 3 more partitions out of the rest of the room. This way your son can keep all his important files on D:, E; or F:. Should he ever (when he) reinstalls XP he can just put it on C; and this will leave all his files untouched on the other partitions.
Be aware that if he does a Restore/Recovery XP install the procedure may wipe the entire hard drive. However, if you are using a SCSI drive I suspect that you have an XP Installation CD which allows full control over how the install is done.
I suggest you contact Norton/Symantec Technical Support for this problem. Using SCSI drives is almost archaic - there may be some "gotchas" you may not be aware of.