Bimmer,

This is what you do: partition your drive with fdisk into non-dos partition
and a dos partition. Format the last one to VFAT. Leave the first as non-dos
Install Windows to the VFAT partition.
RunRedHat workstation install... this will automaticly format your non-dos partitions into a linux boot partition (16MB), a Linux root partition, a Linux Swap partition and a Linux Home partition. It will recognize your WIndows and suggest to install Lilo to the MBR of the first HDD. It will add a Dos label to your lilo menu, this will give you the possibility to boot windows (you can rename the dos label to windows) or boot your RH 7 Linux.
Normally your partitions in Linux will look like
IDE 0, Master Disk: dev/hda
IDE 0, Slave Disk: dev/hdb
IDE 1, Master Disk: dev/hdc
IDE 1, Slave Disk: dev/hdd
you can recognize partitions by the numbers, like hda1, hda2, hda3

If you are still confused, read the Linux dual boot howto's:
The Linux + Win 95 Mini-HOWTO: http://sunsite.unc.edu/LDP/HOWTO/mini/Linux+Win95.html