Just to get it out of the way, this will not work in a catastrophic failure situation.  You need to have the original hard drive (or at least a big drive to put it on to start).

I just bought an Intel X25-M SSD, what I didn’t realize when I bought it was that it was 160GB and my current drive is 180GB.  My original plan was to simply restore a WHS backup onto the new drive, but I quickly found out that this wouldn’t work.  WHS will only restore to a drive of equal or greater capacity, regardless of the amount of free space on the original drive.  So I figured I should be able to easily shrink the existing drive and restore it.

Vista and Windows7 both have a Shrink option in Computer Management, but it is terrible.  With 35GB of free space it would only shrink the partition by 635mb. 

There is a great article on How-To-Geek that shows how to work around this, none of it worked for me. 

I downloaded Easeus Partition Master Home Edition, which is free, and used it to VERY easily shrink the drive down to 150GB.  Took about 3 minutes and a reboot, it was just that simple.  Once that was done, just ran a backup the new drive (WHS will treat this as a whole new drive) then switched out the drives and did a restore on my new smaller drive.  Couple hours later I’m up and running on my new super fast SSD.