Unfortunately, there are a few reasons which might make it necessary to put DOS/Windows and Linux together on one laptop. Often the support for the flash ROM of PCMCIA cards and modems is not available for Linux, or you have to retrieve hardware information, which is not visible with Linux, due to a lack of support by some hardware manufacturers. I'm not sure whether this tasks can be achieved under an emulation like DOS-EMU or WINE.
If you want Linux with X11, Netscape, etc., and Windows95, things will be tight in a 1GB harddisk. Though I do so with a 810MB disk.
Often you get a preinstalled version of Windows on your laptop. If you just want to shrink the Windows partition, you need a tool to resize the partition. Or you can remove the partition first, repartition, then reinstall. Most of the following information I found at the page of Michael Egan <Michael.Egan@sonoma.edu> at http://libweb.sonoma.edu/mike/fujitsu/ .
A well known and reliable, but commercial product is Partition Magic http://www.powerquest.com/product/pm/index.html from Power Quest.
System Commander 2000 resizes FAT32 partitions, unlike Partition Magic, SC2000 seems to be able to work without the presence of an installed Microsoft OS.
One more "newer" utility for repartitioning and resizing FAT partitions is Ranish Partition Manager/Utility (FAT-32 support is claimed for this as well, Linux support is taken into account.) Ranish Partition Manager/Utility .
Many people have used FIPS 15c (which may support FAT-32) FIPS for repartitioning FAT partition sizes.) Also, another version from a different source is FIPS 2.0 (claims to support FAT-32) FIPS 2.0 for repartitioning FAT partition sizes.)
You may share your swap space between Linux and Windows. Please see "Dealing with Limited Resources" section.
With Linux you can mount any kind of DOS/Windows partition of the type msdos, vfat and even compressed drives (Drivespace, etc.). For long file names use vfat and if you like autoconversion ( a nice feature for text files), you may do so by using the conv=auto option. I have used this in my /etc/fstab, but be aware this might cause some strange behaviour sometimes, look at the kernel docs for further details.
/dev/hda8 /dos/d vfat user,exec,nosuid,nodev,conv=auto 0 2
The other way round there are also some tools, for instance at http://uranus.it.swin.edu.au/~jn/linux/ , which provides a tool to read and write ext2 partitions from Windows9x/NT.
LREAD is a tool suite for Windows 9x and Windows NT (or DOS or Windows 3.x for those who still have it) for accessing files on Linux harddisks (Linux's native Extended 2 filesystem).
The tools allow to list directories, to copy files from Linux to DOS and to copy files from DOS to Linux. You also can delete files or modify access rights of Linux files from DOS/Windows.
In combination with an included simple server program, you can also access your files from a remote client over the net (however, this might be a security risk, as access protection in this case is rather simple).
The package includes binaries for DOS/Windows 9.x and for Windows NT as well as source code. The package is copyrighted by me, but may be freely distributed under the GNU General Public License (GPL).
You may use the CD drive of a desktop (or copy the content of the CD to the hard disk) and connect both machines with a nullmodem cable. Than use a DOS boot floppy and the program INTERLNK.EXE to connect both machines.
Windows/NT offers: RAS - Remote Access Service
Windows/9x/NT offers the PPTP protocol to connect to remote sites via a TCP/IP tunnel. This protocol is also supported by Linux. PoPToP is the PPTP server solution for Linux allowing Linux servers to function seamlessly in the PPTP VPN environment. This enables administrators to leverage the considerable benefits of both Microsoft clients and Linux servers. The current pre-release version supports Windows 95/98/NT PPTP clients and PPTP Linux clients. The PoPToP pre-release server is not yet fully optimised. On release, PoPToP will be fully compliant with IETF PPTP Internet Draft and it will seamlessly support Windows PPTP clients with the full range of encryption and authentication features.