Good... This tells me that you don't have a hidden partition that Windows usually won't show you. Also, you won't have to worry about creating an extended partition to keep from running out of primary partitions. You already have an extended partition. The two FAT 32 partitions are logical partitions in this extended partition.
You can, of course, shrink your Windows partition if you wish, but I honestly don't think I would bother. You have plenty of space to work with without doing that. You are not space restrained. It would certainly speed up your install process not to shrink. Shrinking a partition is time consuming. There is also more risk of damaging your Windows install if you shrink too. Shrinking can be done reasonably safely these days but there is always a small chance that damage will occur, even if you do everything right. In my mind it isn't worth even the small risk involved.
Since you are looking toward making a complete transition to Linux, you are right in not going with an NTFS shared partition. Use ext3 for your data partition. You can mount it and your existing Windows partition in your /home folder and still have access to what is on your Windows install. This will let you use a more robust and secure Linux file system for your data storage.
I would trim back your / partition a bit, as there is no need for that much space but other than that you seem to be pretty much in line with what I would suggest.
Trying to keep the install instructions as simple as I can this is what I would do.
1.) Boot Live cd to the desktop and open gparted partitioner, as you did to get the screen shot.
2.) Delete sda5 and sda6 partitions. There are lots of how-tos on how to use gparted on the net. Just Google gparted and familiarize yourself with the screens and process. It isn't hard, really.
3.) Create a new sda5 logical partition of 1.5 Gig. and set the type as swap
4.) Create a new sda6 logical partition of say 15 Gig., (I usually use 12 Gig.), for / , format the FS type as ext3
5.) Create a new sda7 logical partition of say 12 Gig., for distro testing, format the FS type as ext3
6.) Create a new sda8 logical partition of say 65 Gig., for your first data partition, format the FS type as ext3
7.) Create a new sda9 logical partition of say 65 Gig., for your second data partition, format the FS type as ext3
Leave the rest unallocated. There is no law that says you have to allocate all your space now. You can always come back and add another partition if/when you need it for something that you don't anticipate now. It is much easier to make another partition than it is to start trying to shrink and rearrange other partitions to get space to do something you didn't anticipate. When you get ready to remove Windows you can just reformat it to ext3 and you will have another nice size partition to use too. You may want to use VirtualBox or VMWare at some point and this would work nicely to store virtual machines on, as an example.
When you have finished making your new partitions close gparted and start the installer from the desktop.
8.) When you get to the partitioning part select "manual". To keep this part as simple as possible I would suggest you only assign two partitions. Assign sda5 as swap and sda6 as root. In fact, I think the new installer picks up the swap automatically, but if it doesn't assign it yourself. Forget the rest for now. Let the installer complete the install. Reboot and remove the Mint disk when it finishes.
9.) You should get the nice Mint boot menu where you can select to either boot into Mint or Windows. Boot Mint.
10.) Ok, now we will mount your data and Windows partitions in your /home directory so you will have easy access to them. This is pretty much a cut & paste operation. Where I have WindowsXP, Data1 and Data2 you can change the folder names to whatever you want them to be. Just be sure you change all the occurrences to match your choices. You should substitute your user name for mine in all cases. Open a terminal, you will find it in the desktop menu, and type:
echo "/dev/sda1 /home/fred/WindowsXP ntfs defaults,umask=007,gid=46 0 0" >> /etc/fstab
echo "/dev/sda8 /home/fred/Data1 ext3 defaults,noatime 0 2" >> /etc/fstab
echo "/dev/sda9 /home/fred/Data2 ext3 defaults,noatime 0 2" >> /etc/fstab
(There are no returns in the above lines.) Close the terminal.
Reboot your machine and select Mint once again. You should now have your Windows and data partitions mounted in your /home directory for easy access.
Oh yeah... you should probably check and make sure your Windows install still boots ok.
One thing you mentioned in one of your posts was encrypted files. Before you do any of this you might want to make sure that you decrypt these files. I don't know what you encrypted them with but you need to make sure that whatever it is will work on both Windows and Linux. It is just safer to start with unencrypted files and use an open source encryption routine. I would suggest TrueCrypt but there are others that work fine too.