As to the partitions, Fdisk will only create a single primary FAT partition, it insists on creating any additional partitions as Logigical drives inside an extended partition. So just how you got this second primary partition is not clear, and I don't know if it can be safely deleted by Fdisk (since you can't seem to select it without getting C). I would use a different partitioning tool. I like Ranish Partition Manager, built into XOSL but also available as an independent download that should run fine under DOS. There are likely many other free partitioning tools that will let you delete this as well, including some built into Knoppix. The thing is that I don't have a high comfort level with the partitioning tools in Knoppix. You might want to look at cfdisk but I don't know it well. qtparted is another partituion tool but I see lots of reports of beginners destroying their entire disk with it, so I would caution anyone who is asking partitioning questions from using it.

Any insight on how that second unformatted partition got there? You might be able to delete it as a non-DOS partition, but I sure would not try the "delete Primary partition" option.

The proper procedure for installing DSL is to read the DSL install instructions very carefully and be very sure that you understand everything before installing. I have not installed DSL and I don't offer any support for installing any live CD. If you want help installing Debian I'll try to help and many others here know plenty more than I about installing it.