Personally, when I first got into linux, I wondered where to put it as well.
I looked in the recovery partition and there was nothing in it (on my system) so I just made sure that it was large enough (it was) and put my mandrake in there.
Since then, I've got my hand's on a copy of partition magic and do all my partitioning with that.
One thing I would suggest, is that if possible, have more than one partition if you've got room.
I currently have boot, root, swap and user.
The reason's, well all the boot stuff sit's in /boot, so it's harder for me to screw it up. The /swap, well it probably isn't needed, but I had to have one when I played with installing gentoo and I've made that twice the size of the installed ram (which is a bit of historical linux wisdom). Then the actual OS lives in the /root and all my user stuff, well obviously that lives in the /home.
The biggest advantage of having seperate /root and /home is that if you screw up the system, you only need to re-install the OS to the /root partition and all your user stuff, files, preferences, etc etc are left intact. You just have to make sure that you install all the same app's in the root (I just do that from the mandrake powerpack install disc, and the only thing I have to get is a more up to date version of the Opera browser and I get all the pref's, history, etc still there).
How large you'd make the partitions, depends on how big your hard drive is. I started with a 40 gig unit. That ended up with 20 for XP and 20 for mandrake (everything installed to the one partition). Since then, I upgraded to a 120 gig hdd, and now it's about 20 for windows, 1 gig for /boot (probably too much, but it was a nice round number), 1.5 gig /swap (that's the 2 x installed 768 meg's of ram bit mentioned earlier), 20 gig's for /root (again probably too much, about 5 would probably have done) and the rest is /home.
Hope that help's some.