First of all welcome to the world of linux.
Now to what you want to know.
When you go through the install process it will ask you where you want to install to. Provided that your hardware gets recognised it will see the harddrives and ask you some questions about it. Like which one to use and how much of it.
Point it to the partition that you want to use. At a guess I would say it would be hdb3. This means that it is on the primary IDE bus as a slave (the hdb bit) and it is the third primary partition (the 3 bit). In this case the one which is currently formatted with fat32 filesystem. But as linux does not install on fat32 fs it will need to be reformatted with something that will work, like ext2, ext3 or reiserfs. These are the most commonly used filesystems, there are more out there, but for now stick to one of these.
The most important thing to remember is that when you play around with formatting and changing partition tables you can lose all the information on the disk or disks. There are ways of getting it back but these can be very complicated and sometimes costly.
BACKUP ALL IMPORTANT STUFF BEFORE YOU MAKE CHANGES.
Alternatively use a different machine if possible. Or remove the current drives and put one in that does not contain anything with wish to keep.
Please don't let this scare you off, once you begin using linux you will enjoy it.