looks like a pretty good explanation of creating a separate /home on Ubuntu - even has screenshots.
Make sure everything works under the new arrangement before re-installing. On the reinstall, use the "expert/advanced" partitioning option. Pick your current main partition and give it / (root) as the mountpoint - allow it to reformat it (ext3 is fine).
Pick your newly created /home partition and give it /home as the mountpoint - do *not*
allow it to be reformatted. During the install, when asked for a userid, use your current id and password.
That's about the lot I think.