40 gigs is obviously plenty to partition. They even have stuff that can read from an NTFS partition meaning you could play mp3s and watch videos from your windows partition saving a lot of space.
I can manage to partition a 3.0 gb drive for slackware & use full install. I installed a ton of things I didn't need / use yet still had room to function. If you're so low on space maybe you should consider sticking to one operating system and using a live cd for linux or buy a shell.
Toby: when the developers include a 3rd partition in their handbook, there's usually a reason. Also I haven't heard of, until today a 2 partition current distro of linux box.
I don't have anything against Linux Guru. I just think passion would be better off following a guide rather than listening to him. As the developers are usually really gurus vs a self appointed 14 year old guru.
Preparing the Disks
Configuring Your Boot loader
Yes these are gentoo docs so some of this may not apply to Redhat 9.0. Like the whole emerge part. Editing the configuration file and information about partitioning your disks should be pretty accurate.