During installation from a bootable USB, Ubuntu installer does not present the option of "installing alongside" Windows 7, but only "erase HD completely" or "Do something else". I am concerned that this is an indication that if I go ahead with a manual partition of the disk, I may have problems dual booting into Windows 7 - grub may not recognize W7 OS.
Don't choose "Erase HD completely" (it will delete your Windows).
The problem here is that Ubuntu does not detect your Windows.
Please indicate your Boot-Info URL if you want further advice.