Default memory

You can install Ubuntu in differents partition juste you need to have an
empty patition for your system
" / " to install ubuntu and another partition for the Swap (for the swap you
need to have a small partition whit size is juste the double of your
memory).
Then you install Ubuntu, the linux boot loader "Grub " will replace the
Windows boot loader, and you will have what's called " Dual boot " to Ubuntu
an Windows without any change to XP.
To create the empty space in your hard drive use any partition manager.

The memory is RAM (Randomly accessed memory). What you are referring to is disk space.

if you want to clean out some space you can run:

sudo apt-get clean

This will clean out the old debs from your system that you have installed with synaptic etc. You could also uninstall any unnecessary apps you dont use or use smaller ones.

For example, loads of people install openoffice but only use the word processor. Abiword will fit this requirement precisely as it can do all the writer app can in openoffice but does not come with all the extra unused stuff

You can see a list of installed apps with

dpkg -l | less

make a not of apps yuo do not use then simply uninstall them in your chosen method

Gimp is also another disk space hog and is default in Ubuntu and may be surplus. Its good to trim the fat as much of the stuff in an install is not needed. You may want to consider:

xsane - scanner utility (do you own a scanner?)
hpljp - HP driver set (do you use an hp printer?)
gimp
evolution - Saves RAM here as it runs as a service at bootup. If you use webmail or something like Thunderbird then this can be uninstalled

Basically in Linux, the default setup will work but badly and tuning and customisation can do wonders for storage and performance. I have a few systems around but my main desktop's / partition is using just over 2Gb of space. If you run:

df -h

you will see the data amounts used in your partitions.