Do I need to do that manually, does the Windows Installer do it for me, or do I need to do it at all?
The Best way is to create a partition with Windows CD for C drive. But make sure you have some unpartitioned space for Ubuntu. Boot from the Ubuntu CD and choose the option which says unused space. This will create a dual boot without loosing the data on your windows partition. For more info on that see Installing Ubuntu Desktop
If you are installing using Wubi, Wubi will create a virtual partition. Wubi lets you install and uninstall Ubuntu from a Windows desktop just like a windows application. It will add an Ubuntu entry to the Windows boot menu. For more info see the Wubi Guide