Here's a couple howto's:
http://www.asiaosc.org/article_82.html
http://www.freenet.org.nz/misc/knoppix-install.html

I'd make a third partition with ext3 as /home. With a separate home you can keep your user files and settings if you need to reinstall.
This one explains how to use a separate /home and then some:
http://www.math.rutgers.edu/~amurphy/linux/steps.html