Back-up all data on the SD Card to a computer - partitioning is a destructive process meaning all content of the card will be wiped.
Open up ROM Manager.
Select "Partition SD Card".
Select an option for the "Ext Size". This is the size of the partition in which apps can be stored. I recommend 256MB for 1GB SD Cards and 512MB for any cards larger than this.
Select an option for the "Swap Size". Not all ROMs use this so I recommend you choose either 32MB or 64MB, but no higher.
Click "OK" in the pop-up to continue.
Let the phone boot into recovery mode and do its thing - this can take several minutes, so be patient.
Reboot your device.
Done!