The Data part is NOT for restoring, it is just what is says, it is for DATA.
Data can be any personal file such as digital photos, word files and other office documents, video files, music and so on.
So you dont need to increase the size of the hard drive, just move personal files from C to D. This is easy to do with cut and paste or drag and drop. Note: DONT move Windows files or program files, just move personal files.
I am a bit confused when you say the laptop had no software on it whatsoever. So did you put Viata on it or was it on there when you got it (so it DID have software on it).
If the laptop is as it was when supplied by the manufacturer have a look at all the options on the main Windows menu, there may be an option on there for making restore disks or making backup disks (or words to that effect).