If I were you, I'd do this:
Assuming all three drives are in your PC, and assuming you're running Windows XP
Run the live cd and start going through the installer.
Part way through, it'll ask you which drive you want to install on - choose the spare 60GB drive (The installer will show three disks, and how big each one is so it should be self-evident which disk you want).
Next, it'll ask you what to do with the disk, DOUBLE CHECK YOU HAVEN'T ACCIDENTALLY CHOSEN YOUR WINDOWS OR STORAGE DISK!!!! then Choose 'erase entire disk'.
The installation should complete, and you're asked if you want to restart.
Now you should be able to choose between Ubuntu and Windows when your computer starts up.
I found a tutorial for sorting all this out on an older version of Ubuntu here;
http://www.ehomeupgrade.com/entry/2622/how-to_dual-boot_ubuntuI don't reckon the newest version installer will have changed too much,
Now start Ubuntu up, and install the ntfs-config package (the easiest way to do this is to go to Applications > Accessories > Terminal, and type this in to the command line window --- sudo apt-get install ntfs-config)
Now if you go to Applications > System Tools > NTFS Configuration Tool you'll be able to now set up read/write support for your separate 500GB storage drive.
Now you should be able to select which operating system you want to use at boot, and you should also be able to read and write to your storage drive from both Windows and Linux
