Welcome to Ask Ubuntu! As always when something is being done with files, you should backup any and all important things. If you do this and then just select the 3rd partition (does it have any data on it?) it should install there and then on boot-up give you the option to boot into Windows 7 or Ubuntu Server 12.04 LTS.
There is usually minimal risk to installing Ubuntu alongside Windows, but back up your data just to be safe. The 18GB of free space are plenty to install Ubuntu in, though depending on how it is used it may become full, so you might want to add some space to that partition from the 225GB one, but that would come later.
As for right now, you should be totally safe installing to the third partition using using the Manual option during the install. Just select the third partition and then go on from there.