This laptop has a 60meg windows (XP) partition, and over 90 megs of unallocated space. I can't see why it can't find the unallocated space to install onto. It doesn't seem to find the hard disk at all.
Hopefully you ment 60 gigabytes and 90 gigabytes, not megabytes ('meg') ..or if you did mean megs, I'd like to hear how you managed to fit XP into 60MB
Well, the only sane reason I can come up with is that it doesn't detect the disk, because there is no software drivers (kernel module) to know how to work with the piece of hardware. I thought those situations were rare or non-existent, but actually bumped into one some two years ago with a laptop..I don't remember whether it was Dell, IBM or what, but it had a disk which Fedora Core didn't understand back then (it asked me to insert a driver floppy, which I didn't have).
Possible solution..well, if the setup asks you for drivers, you can try to get them (if they exist for your situation) and get the installer detect the disk that way, or you can try if some Linux flavour understands the harddisk (maybe Knoppix is a good start; a live-cd with such a huge kernel that it should support most hardware), or just wait and wonder. A web search for linux drivers + the harddisk's make and model might shed some light on the matter too..