If you want to dual boot, reinstall Windows first, but don't give it the entire disk. Windows will not get along well with Linux if Linux is already there, but you can install Linux second pretty well.

There are lots of different Linux distros and there is no one right choice. But I like Debian, installs cleanly and there are plenty of packages available for it. It is the distro that Knoppix is based on. There are several versions of Debian, refered to as stable, testing and (if I remember right) experimental. Don't get suckered by the names, testing is much more stable than anything from Microsoft. It is what I would recommend for the average home user.