ah, g-parted. i love it.
its a simple enough process with that program, it sets up drivers it needs and then starts up nice and easy (for best results use lowest video settings when presented with the options.)
if your going to reformat anyways, format your drive first, then restart with g-parted, before windows can get its paws in. (so right after the format is done, restart so windows doesn't start copying files). Split it into the two partions you want using the tools given. make one about 10 gigs for windows. that'll give it pently of breathing room. the part can be left as storage. click either "apply" or "change" (can't remember which one it is) and it'll go through and do the sizing you wanted.
now go back to windows, and install on teh 10GB partition, and you are all set.
Just as a note, i had you do a format before partioning because G-parted has a built in moniter that keeps the drive large enough for what is currently on the drive. if you had more on teh drive, you would be hard pressed to change part of it into a 10GB partion.