Ubuntu will try to partition and format the hard drive to Ext2 or Ext3 (unless you opt for something more esoteric). If you let it have its head, it will also zap your Windows partition and eat that, too.
Try telling it to set up two partitions, one for everything except the swapfile, one for the swapfile. Make them in the "available" free space.
If you're used to using FDISK, you should find that on the Ubuntu CD - you can then set up your partitions and format them with that.
If it works out right, you should be able also to set up Grub to boot either Windows or Ubuntu at startup.
Ubuntu should also find the USB keyboard and use that - and your mouse, if you have one.