Software Questions
 

When running WINE, how does a Windows partition with Windows installed help run Windows apps in Linux through WINE? Does it allow it to use the already present DLLs? Does it install straight to the Windows partition?

If I have a separate Windows parition and have installed software on there, I can run the software in Linux using WINE?

All Wine does is makes a fake Windows C drive in your /home partition so you can install Window applications on it. It's an emulator. I think you can run programs off of your Windows partition, but it's not a good idea. Just install the application to your .wine dir. A good tool to use with Wine is... winetools

Having a windows installation simply gives you access to those dll's. If they are not present in the wine path then wine will attempt to use it's own versions. It's certainly advantageous to use the original ones.

Wine will simply allow you to run windows applications under linux. (Somewhere, someone did signficant work with installers, but someone else will have to answer the installer question)

As far as software compatability....

Your mileage may vary.

WineHQ has an extensive list of applications known to work.

If you are looking for complete compatability, you might want to try qemu and run a virtualized instance of windows. This is a bit different then emulating the calls windows applications make, but rather you just run an instance of windows within linux.

Ya, it is actually important to note that Wine IS NOT an emulator (Wine stands for Wine Is Not an Emulator). Wine is an implementation of Windows libraries under Linux. The libraries are by no means 100% compatible with the real Windows libraries so as noted above, your mileage may vary as far as getting things to run. I usually tell people to use wine as a last choice alternative. First thing you should try and do is find a native app that provides whatever functionality you are using.

If gaming is your thing, skip regular wine and go straight to Cedega. Cedega is actually an implementation of wine specifically modified to handle copy-protection and work with DirectX applications.