Hi

I suggest the following for your installation. Since you have not mentioned the size of hard disk of your friend's machine, I will give the data in %.

Assuming that the windows is installed in a min of 2 partitions (40%, 60%) for the current setup, move all the data from the larger partition to a temp location (backup to a tape :-<, to a CD :-|, to another HDD :->). Remove the partition and create one new partition (30%) (DOS -extended - logical). You can put back the data onto this later.

Using the Linux partition utility (whichever is your favorite - I prefer cfdisk), add the partitions (25 - 28%) for Linux and the remaining for linux swap.

The problems your friend will face are (some of us have already mentioned above),
a. re-intallation of M$ OS will cause lilo to loose the boot info. (you may have to boot through floppy or cd and mount the linux, make unix bootable, load lilo - to get the multi boot option re-enabled).
b. data space for the M$ will be less.

thanks and good luck
Nadiminti