You need some free space somewhere if you want to install your distribution. The hard drive you listed has all of it's free space used up for your windows installation.
The complicated answer that you probably don't want to hear has to do with resizing the space you have, but if you don't know what you're doing you could totally kill your windows installation.
Your other option is to buy another hard drive and install there. Newegg is practically giving them away:
And they'll deliver it right to your doorstep usually within 3 days.
When you get right down to partitioning the drive you can get away with putting everything in one partition because it's easy and simpler that way. So if you got one of those 80Gb drives for 40 bucks you would make your root partition '/' ~79Gb and a 512Mb Swap partition should be fine. Swap is Virtual ram, or where the computer saves memory when it runs out of physical ram.