It is really quite simple to install two operating systems on a single PC, then use a piece of software called a 'boot manager' to choose which to load when you start the computer. Microsoft's boot manager only gives you one option, to boot Windows, but most Linux distros include the 'Lilo' or more often these days 'Grub' boot manager which is quite happy to let you choose from a list of operating systems, including Windows.
A hard disk, or for that matter a floppy, can be divided into several sections called partitions (just like you might partition a big office to make several smaller ones). Each partition is then formatted with whatever file system you want to use, and they don't have to be the same. Generally Windows PCs only have a single partition, though some manufacturers now make a 'restore partition' where they store a backup copy of Windows and their original software bundle in case you need to re-install.
If you are going to be dual booting you will need at least 3 partitions, one for Windows (which might use FAT32 or NTFS formatting), one for the Linux OS and one for 'swap' which is used by Linux as temporary memory rather like 'virtual' memory under Windows. Linux can use various formats, ext2 is common for swap, and can be used for the main bootable partition too, though ext3 or reiserfs are more common. If all this sounds complicated, don't worry the installer supplied with your distro will take the strain.
Once partitioned your disk will appear to Windows to have shrunk, Windows simply doesn't recognize the existence of file systems other than its own. Linux is more accommodating and will recognize, and make use of, a wide range of file systems.
A few years ago most distros included a partitioning tool which would assess how much space was on your existing Windows disk, and suggest how much it would be safe to give over to Linux. If you checked 'Agree' it then re-sized the Windows partition and re-formatted the freed space for Linux. This worked very reliably with Windows 95, 98 and ME that used the FAT 32 file system, but not so well on NTFS which is normally used by Windows 2000 and XP.
Possibly because of this, or maybe because Microsoft have been grumbling about infringement of the copyright they hold on their file systems, resizing tools have disappeared from most distros, but are still available as separate applications. Whilst you are still in the proprietary software world you might like to buy Norton Partition Magic which is reckoned to be very good. Or you could take your first tentative step into the world of Open Source Software by downloading 'GParted' (Gnome Partition Editor) from Sourceforge.
Gparted is supplied as a small (30MB) .iso image file ready to burn to CD-R (or -RW) to make a bootable CD. Do that and put it to one side for a moment...
Though GPArted is good, nothing in this life is certain, especially where computers are concerned, so some basic precautions are required. First, a backup of everything you would hate to lose if the partitioning goes wrong. Check that you have the necessary disks to re-install Windows and any Windows software you want to keep using too. If you have them you probably won't need them, but if Gparted fails (or you mess up and make the wrong choices) you'll be glad you've got them.
Make a note of settings for Internet dialers, ADSL modem settings, POP3 accounts, SMTP accounts and passwords for everything. It's a good idea to export Internet bookmarks and your email address book too. Then defrag the disk, this makes the re-sizing and partitioning much quicker and more reliable. When you sure you've checked everything, put the Gparted CD in the drive and reboot.
Your computer may, or may not, be set to boot from the CD/DVD drive. If you're not sure, just wait, if it goes straight into Windows as normal, it isn't. So reboot again and this time watch the screen closely until you get a message from the BIOS along the lines of, 'To Enter Setup...' then do what it says – usually it is 'Hit Escape' or 'Hit Del'. Do it and in the BIOS setup set CDROM as the first boot device. Save settings and exit the BIOS Setup. This time your PC will boot from the GParted CD.
Gparted actually loads a simple version of Linux into RAM, so you will see a lot of unfamiliar messages telling you what's happening, you can ignore them until you get to the 'Select your language' screen. Choose whatever you prefer and then you move onto choosing a keyboard layout. Do that too and you'll be asked to choose the X-server type.
If you've never used Linux before this might seem weird, so a brief digression is in order. 'X' is the graphics system used by most versions of Linux. It drives your screen (via your graphics card) your keyboard and your mouse. The X-server provides services to other software such as window managers and applications. These days fully featured distros use a version of X from Xorg, but it uses a lot of resources so you could choose the simpler Xvesa instead. Next choose your preferred screen resolution and color depth (the defaults will probably be sensible). After a brief pause the Gparted screen pops up.