I downloaded Ubuntu and put it onto a DVD and i assume it works fine because the disk is working. I looked around at the options and noticed that I could install alongside windows, but I chose to just try it. Now I've decided to install it alongside windows(vista) but now the option is no longer there. Any ideas..?
As you suggest, creating free space by shrinking the partition would be a good way to get past this. (Obligatory warning : Back up your Windows data if you haven't.)
You can partition/resize in either Windows or Ubuntu/Linux.
In one case, I had to use a utility in Windows to actually create an ext3 partition in the free space that Ubuntu would see. After that, I was able to boot the Ubuntu DVD, and was finally able to select the ext3 partition and format it to ext4 for Ubuntu without harming the existing Windows installation.