I thought there was normally an option to "use free space" on the disk. That, I would presume, would use the 160 Gb that you have freed up.
As it is, you can select "Specify Partitions Manually". From there, you should be able to see listed your Windows partition and your free space. To make a new partition on the free space, click on the space in the list, and then click "New Partition".
You'll want to format it as either ext3 or ext4, and set the mount point.
Personally, I create three partitions. One specified as swap, one specified as "/home", and one specified as "/". The swap space can vary depending on usage, but will give you better system performance under certain conditions. I tend to go about the same size as my RAM although there is no hard and fast rule as to that. The / partition doesn't need to be huge. I tend to give it 10 Gb, although this is more than is necessary. If you're liable to use up all of your 160 Gb then you might seek out more specific required sizes. Finally, the rest of the space I dedicate to /home, which is like Documents and Settings under XP (to give as relevant an example as possible). Know that these are all just my way of doing things, and may be less efficient than some. I find that it makes some things (like upgrading versions of mint) easier.
If I'm stating obvious facts, sorry, I was running on the fact that you said you needed help through the install. If that's too complicated, it may be better for you to try out mint4win, or spend some time in the documentation. For a long time, the installer partitioning was a deterrent to me when I went to install Linux alongside Windows. Once you're able to grapple with that much learning, though, the rest of the system begins to come a little more freely.
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