I want to install Ubuntu alongside my Windows 7 operation system.

During installation I have three options:

1. Install alongside the existing OS.
2. Remove everything and install Ubuntu.
3. Manual partitioning (advanced).

The above list is not precise (I do not remember what exactly was written there and I just write options as I have understood them).

I know that option 2 is not mine. So, I need to choose either 1 or 3. I do not know which one I need to choose. I want to have a possibility to manually specify space assigned to Windows and Ubuntu (for example 40% for Windows and 60% for Ubuntu).

I chose the 1st option and I saw a window with the following information.

Allocate drive space by dragging the drive bellow.
File (48.1 GB)             Ubuntu
/dev/sda2 (ntfs)           /dev/sda3 (ext4)
286.6 GB                   241.7 GB

2 small partitions are hidden, use the advanced partitioning tool for more control.

[use entire partition]     [use entire disk]

                                         [Quit]   [Back]   [Install Now]

My problem is that I do not understand what I see. In particular I can press [use entire partition] or [use entire disk] and I do not know what is the difference. Moreover, as far as I understand, I can even press [Install Now] without pressing one of the two above mentioned buttons. So, I have 3 options. What is the difference between them?

The most important thing for me is not to delete the old operation system with all the data stored there.