I recently found and mounted a secret 4GB FAT32 partition on my hard drive. Explorer says it is called "IBM_SERVICE". Is this the remains of a recovery disk that my Thinkpad may have once had?

If it helps, the computer is a Thinkpad t42 that I bought as a refurb from IBM/Lenovo about 5 years ago. I think it came with a recovery partition, but in the time since I bought it the hard drive has been wiped and XP has been reinstalled. Could the partition have survived the wipe?

My hard drive is only a 32GB Fujitsu mht2040ah, so I need every gigabyte I can get. Is it safe to delete this partition so I can recover disk space?

I think the partition may be useless to me, as pressing my "Access IBM" button during boot doesn't do anything

It's probably the recovery partition, which I think were hidden by default on the T42. That's how it survived the wipe. If you've done a clean install on the T42, I don't see much of a need to keep it.

Yes, that's the old recovery partition.
Apart from the Access button you could also try F11.
If neither work, you can delete that partition.
BUT, I think it lies at the beginning of the HD, so it wouldn't do you much good, unless as a small storage partition.
IMHO just buy a larger size PATA 2.5" HD, up to 320GB, and do a fresh install. Windows will thank you for it.