I want to install Ubuntu 11.10 on Lenovo y560 as a dual boot alongside Windows 7. Will this installation harm the auto recovery of Windows 7 and how will it effect the processing speed?
No, it will not. Auto recovery is a Windows thing and does not get affected by Ubuntu.
Ubuntu and Windows are 2 separate entities that can fully use all of the resources available in a dual boot. The only perfomance hit you will see is a 1 or 2 seconds delay during boot since you will have grub installed and the option to choose to start either Ubuntu or Windows.
Only when you install 1 (guest) of the 2 into the other OS (host) with VM Ware or Vitualbox will the guest OS suffer a performance penalty since the host will take away some performance.