pinga123, my advice would be not to try to compare Linux or Unix to Windows. It will lead to bad assumptions.
Instead, you should concentrate on Linux/Unix basics, and the differences and similarities there.
I keep looking for good tutorials to explain the concepts, but find ones that I understand, but only because I already understand the topic. This stuff is not complicated (conceptually), but explaining it always is difficult. Once you understand it, it's simple.
Do a 'man mount' and look at the description. 'mount' takes a formatted device and "grafts" it onto some location in a tree-like (always represented upside down) hierarchical directory structure.
When the system is being initialzed your root filesystem is mounted at '/'. From there you can take other formatted filesystems and mount them off of that root filesystem directory tree. Very un-Windows like.
(NOTE: the /root directory is the home directory for the root ID and is something completely different from the root filesystem!!! This always leads to confusion.)
The devices being mounted (referred to as block devices) can be partitions, LVM Logical volumes, or RAID Array logical devices. They need to have been formatted with a filesystem that Linux understands, but Linux understands a lot of filesystem types - even Windows FAT16/FAT32/NTFS filesystems.
But there are few parallels between DOS/Windows lettered drives except that they are on a device and are formatted with a directory tree type filesystem.
Unlike Window, Linux has different partitions naming policies.Most of the system data resides in / .Does this mean its similar to c: in windows system where all system data resides ?
All of the systems data resides under '/' somewhere. There is a convention for where it should go that all of the distros aspire to - to a certain degree. Google for "Filesystem Hierarchy Standard". As sem007 said, it is popular for some directories, like /boot, go into their own filesystems. It's personal preference. But certainly you can't be guaranteed of where other people will place the parts of their install.
can we reinstall another flavor of linux by just formatting / ?
Sort of. Installing on the block device that contained your old Linux install will certainly replace it, but often certain directories (/opt, /var, /home) are segregated off onto their own filesystems on other block devices (ie. other partitions, logical volumes, or whatever). The installer for your distro (usually with your guidance) determines where things go.
is it possible to dual boot two linux flavours in same machine just like we can dual boot two windows OS machine by installing one OS in c:drive and another in d: drive and making changes in boot.ini file?
Yes. You can have as many distinct installs as you can fit (I had 7 at one time on the same machine). You can even boot into non-Linux systems, like BSD, Solaris or Windows. It needs to be planned properly and there are lots of gotcha's that you can run into.
This is frequently done on home, lab or development machines. Usually not done on a businesses' "production" machine.