Well I'm little more than a newbie myself, but I'll have a go at helping out here. Please listen to others with more experience before you follow all my suggestions...
1 - During the install use the free space on window option. Now what exactly does this do??? I assume that this will create a partition for me? How big?
No This is not correct. Only if there is spare "unallocated" (i.e. not formatted) space on the HD will this option be of use.
2 - I create a partition on my hard drive pre linux install (I have partition magic and have used this in the past so some experience). How big should I make the partition for linux? Some post say 5Gb, 8Gb, some say 10Gb... How much room does linux take? I'm assuming that this should be a fat32 partion as I believe linux cant use NTFS?
If you ask 10 people how much space you'll need you will get 10 different answers. Personally I would say that 10Gb would be ample for any distro (NOT including data). For data here's what I suggest...
Linux can read NTFS but can't write to it so what I would do is:
1) Use partition magic to find how much room you have left out of you 145Gb after Windows has had its lunch...
2) Use Partition Magic to create an EXT3 partition for Mandrake of about 10Gb
2a) [Personally I would create another EXT3 partition for my /home (linux data) storage but this is optional - read up / ask questions]
3) Create another (small) partition as "Linux Swap" - Roughly double the size of your RAM (e.g. 250Mb RAM -> 500Mb Swap). If in doubt 500Mb is usually OK.
4) Use Partition Magic to create another partion - this time FAT32 - with as much space as you have left (give or take a few Gb). This partition will be accessible (read & write) to both Windows XP and Linux. This is where you can then store all your data from either system.
5) Make sure you know which partitions are which and then boot the Mandrake CD and opt for "Manual Partitioning" - select your EXT3 partition for Mandrake to install into with the Swap partition for Swap.
6) The Mandrake install will detect your WinXP installation and will create a "Bootloader" (Grub) which will allow you to decide which system to use at boot-up.
7) Once you are up and running you will need to edit your /etc/fstab file in Mandrake to give you easy access to to "shared" data partition. There is plenty of information about how to do that in this forum - just ask if you get stuck.
8) Good Luck!
Hope that helps