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The BIOS boot order must be changed so that USB-zip(usually) is 1st, then CDrom, then HDD.
The partitioning varies greatly on want you are doing with it, and if you want to use the complete usb drive. Most distros only need 5-10GB /root + /swap (size varies on your ram) + /home (your data space is best on a separate partition).
If you are simply testing the distro, just follow the default prompts to the CORRECT HDD, and be very careful when and where you choose the boot loader option so it does not install to your main PC drive and mess up XP. The install varies some, with each distro.
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