Fear not, citizen! Your questions are about to be answered!!
All the versions of Ubuntu that I've used (6.10, 7.04, and 7.10 which is the latest) will automagically detect Windows and resize your partitions for you, preserving Windows. There is no need to resize them yourself prior to booting the Ubuntu CD. Here's a tip, though: defragment your Windows drive and run chkdsk before attempting to install Ubuntu; those are the two main problems associated with resizing the partitions.
There's no easy way to have Ubuntu and Windows side-by-side without overwriting the Windows MBR with GRUB's. The Windows MBR does not (and likely will never) be able to boot non-Microsoft operating systems. Luckily, GRUB can boot just about anything. I would advise letting Ubuntu overwrite the MBR with GRUB. It will automagically create the necessary settings to boot Ubuntu and Windows.
Here's a quick tutorial of how to install Ubuntu next to Windows without
overwriting the MBR: http://ubuntuforums.org/showthread.php?t=56723
A big pain if you ask me.
Should you decide to remove Ubuntu and go back to Windows only, here's what you do:
1. Come see me for a good talking to.
2. Seek psychiatric advice.
3. Download the XP Recovery Console from here
and use it to fix the MBR
Edited by Amazing Andrew, 11 February 2008 - 11:32 AM.