Partition Question Boot.ini

I recently had a customer's machine in for repair. The OS HD had developed bad sectors.
The 2nd HD was a 500gb Seagate so I used Paragon HDM 12 WinPE to create a new 120gb partition before the partition on this 2nd drive and then managed to clone the OS drive into this new 120gb partition.

All went well but there was something I noticed in the boot.ini (XP) file and this is my question.
It lists the partition containing the OS as partition 2 and yet it's in the first, And newly created 120gb partition.
Now I can kind of understand how the original partition might retain the partition label 1 but I just wanted to run this by somebody why might be able to explain better. Can the partitions be relabelled so as the boot.ini reads correctly or was I right to leave it alone.

I tried editing Boot.ini to partition 1 but it failed to boot complaining about not finding Hal. I checked for system files on the second partition and there were none.

I quickly ran a fixboot and fixmbr from the recovery console but it made no difference. Thinking about it.... Could the Boot.ini already have listed the OS as partition 2 before the cloning operation ?

I have already returned the machine to the customer.

Thanks