I tried to install FreeSBIE Live distro on HDD. It says to setup the partitions before starting the setup as it doesn't have the utility.

I am new to BSD. Please tell the steps to do it. What all partitions are needed and which program to use to create them.

Thanks

FreeBSD which includes FreeSBIE wants to be installed on a primary partition, called a slice when talking about BSDs. Fdisk or cfdisk will modify the hard disk. I use cfdisk because I find it easier than fdisk. It can be found on many live CDs like Knoppix, Kanotix, Damnsmalllinux and many others. Boot the live disk, open a terminal, and type "sudo cfdisk" without the quotes. If you use one of those live CDs a linux partition will be created. That is not a problem. Move the cursor to Type and choose FreeBSD. That will create a slice A5. Most likely FreeSBIE has both fdisk and cfdisk so you could use one of those to do the same. I have been using Linux for three years so I think first of solving a problem with Linux. Soon I hope to work entirely with BSDs so the answer will be found in FreeSBIE, RoFreeSBIE, or Frenzy.

I haven't installed FreeSBIE to hard disk so I can't say for sure but I think if you left the partition (slice) as linux (ext2) the installer will change it during the install to A5. I know that is true when I install PC-BSD. I think I did it that way when I installed DesktopBSD. It is a small point.

So, FreeBSD goes on one primary partition (slice) A5. The installer using disklabel will create the sub-partitions needed.

Will these sub-partitions ultimate be visible as new partitions or only first initial partition will be visible to any partitioning utility?

Usually only the first, unless you have a partitioning utility that can read BSD labels (I haven't come across any yet).

Thanks. Once installation is over I will understand better.

i tried installing FreeBSD 6.1 before.. it didn't read my Extended Partition of my HD..

It requires primary partition.

They will be seen as partitions by many partitioning utilities, but it's better to use disklabel or the GUI wrapper (available both at installation time and /usr/ports/sysutils/sfdisk).
At /usr/ports/sysutils/linuxfdisk you may find a port of the Linux utilities. It installs to:
/usr/local/sbin/fdisk-linux
/usr/local/sbin/cfdisk-linux
/usr/local/sbin/sfdisk-linux

If you're booting between multiple OS'es, make sure they all agree on disk geometry.

Good luck.