I hope this helps:

If Windows is using the FAT filesystem then there are ways to install linux here, this usualy involves installing linux into a folder (e.g. C:\Linux) I'm not sure but I think Mandrake 7 can do this. This provides you with a safe and easy linux installation but is not as customaizable or fast as one on a native file syste. By the way the way this works is by using te FAT file system as a Unix one and changing the root folder to wherever you installed, it's called a UMSDOS system.
The Mandrake install program should let you partition your system using Disk Drake, this is a handy and easy to use graphical tool. If you have some free space (that isn't part of a partition) then it should be really easy to add a couple of partitions by telling it to automaticaly do the partitioning. If you are going to be resizing your Windows partition then it's probably wise to back it up first. If you want to play with the partitions and dont mind command line tools heres the ones I like:
GNU Parted -- http://www.gnu.org/software/parted/
CFDISK -- I'm not sure where this is from (try google.com/linux)

Good Luck