installing Ubuntu: what kind of partition and from which operating system to format the partition.

So I've free 20 gigabytes in windows and have yet to format it. It is currently a raw partition and a logical drive. thats how windows disk maneger see the drive. I was wondering how to proceed. I could, on one hand, format the drive while I'm in windows, and I have the option to format it as either ntfs or fat32.

A secondary problem has led me to have to use the advanced options menu from the Ubuntu Installer when it cames to the screen that is supposed to say: 1. Install alongside widows 7, delete windows 7 all together, and advanced options. The option for installing alongside windows 7 is not there leaving me to either delete windows or use advanced options.

So on the other hand I can use the advanced options installing menu to format the raw logical drive named E: .
When i click on drive E: and look go to the formatting options for the drive It asks what kind of drive should i format it as;
Ext4
Ext3
Ext2
Reiserfs
btrfs
JFS
XFS
FAT16
FAT32 or
swap area.

Then it asks: mount point, and lists dos or windows

If i should in fact use the Ubuntu Installer to format this partition and not windows, which out of these two lists of options do I choose?