Regardless of which option you chose, you probably don't know what a good way to partition and format your drives is. You have multiple choices for file system and multiple choices for number of drives and drive space.
If you are relatively new to Windows or completely incompetent, meaning you may have had trouble following me thus far and have no idea what to do once inside Windows, you should just create one large partition. On older operating systems (Windows 98, for example) you are basically limited to one choice for your file system: FAT32. Navigate through Fdisk and create one large FAT32 partition (fill the whole drive). If you're installing Windows XP, 2000, or NT, it's best for you to create one large NTFS drive (fill the whole drive).
You can now proceed to installing your OS. Using the method I described, set your CD drive to be the boot drive and boot off your Windows disc. If you are using an older OS, you may need a separate floppy boot disk. To get this, go here and get a boot disk for whatever operating system you're going to be using. You will use this to run setup.exe off of the CD but only with operating systems older than NT, 2000 and XP - with XP for instance, you boot from the installation CD and go right into the setup.
If you are a little more knowledgeable and have an okay idea of how to use Windows, you may want to go with a multiple partition setup. This will apply mainly for Windows XP and 2000, but can be easily adapted for other operating systems.
Using Fdisk or the Windows disc (or whatever you use), create one partition for your operating system to be installed on. It is suggested you make it 10 to 20GB and in NTFS for Windows XP/2K - this will give you plenty of room for the Windows files, Office and so on. If you have a smaller drive or are using a Windows 9x OS (95, 98, 98SE, ME), make it 3 to 6GB and in the FAT32 file system.
After creating the first partition, you should proceed to install Windows if you are using the Windows XP/2000 CD. After installation, you will create one or two more partitions from inside Windows.
To do this, go to Start, Run, and type in "diskmgmt.msc" (without quotes) and press enter, which will bring up the Disk Management tool. From there, you will see all of your various drives listed. Right-click on the "unallocated space" on the hard drive and click "New Partition" to create a new partition. Leave it at "Primary Partition" on the next window and assign it whatever drive letter you want. Finally, put it in NTFS, with the default allocation unit size and a volume label descriptive of what it will be used for - this is personal preference. If you're using Fdisk or another utility, you can do this before installing Windows but the built in tool inside Windows XP is really simple to use. You can either make a single partition for applications and files, or one partition of each. The size of the partition should be based on how much space you think you'll use which is mostly just for organizational purposes. If you have a second hard drive, here's where you can use it to boost overall system performance a little.
Create a partition on it 2GB or less in size in the FAT32 file system. After that's done, go to Control Panel > System > Advanced > Performance > Settings > Advanced > Virtual Memory > Change. Completely remove the paging file from the Windows partition (C:) and put it on the new partition on the secondary hard drive. Have it be set to the exact size (preferably 2GB) of this partition, with the maximum and minimum sizes being identical.