Use Gparted for modifying your partitions. The GUI interface is easy to use for resizing, moving, creating and deleting partitions. As the first answer advises, you may consider backing up your important data before the operation. I will mention that the gparted partition manager is very robust and with care, the data would hardly be corrupted. I have modified partitions twenty years, using gparted almost like using a word processor and have never lost 1 byte of data. Just be particular which partitions you choose to delete, if any.
You can use either of your drives for the install. I you chose the Alongside Windows option, the installer will shrink the partition according to your specification with the slider and use the space you give it to create what it needs for the installation. It'll create two partitions, one for swap and one for the actual install.
You can manually create the partitions for the install. You should create a partition for Ubuntu that has at least 50 gigs. This will be an ext4 type partition. You'll also need to create a swap partition. This should be about 1 1/2 the size of the ram have in your computer.
On the do something else option choose the partition you create for the installed. Set it for root /. I wouldn't recommend your trying to create separate partitions for /home or any of the other options. Ubuntu will automatically create your /home folder no different from the way Windows create your /users/home directory.
Specify your boot disk which is most likely /dev/sda for your boot drive. This will automatically give you both Windows and Ubuntu in the boot options menu to select from.
The install won't affect your Windows partition. Only the partition where you specify the install. It'll just add Ubuntu to the Boot partition of your specified drive.
Where should I put my personal files
By default they will be in your /home/yourname directory. You'll find this in the file browser when you boot into Linux. The same way you find your personal files in Windows in c:\users\yourname. Any new file or document you create will be placed there by default. You'll also have default folders of Pictures, Videos, Documents, Downloads, Music, and Desktop to choose from, that will be clearly visible in your File Browser.
The File browser
From Ubuntu you will be able to easily mount your Windows partition and browse and use your Windows Documents. However, you can't do it the other way around. Windows can't access the Ubuntu partition.
