[Sorry I cannot use formatting; I am on mobile site now.]
Answers to your comments:
If you make an extended partition, and / /home etc. partition will be logical, but it wont matter to ubuntu. And yes there will be total of more than 4 partitions. In fact that is why concept of extended partition came up - as a workaround to hsve more than 4 partitions.
You don't need to mess with MBR thing.
In addition to the above answer, you can also use use windows built-in disk management feature to shrink the drives.
Go to control panel and search computer management, then you'll find something like disk management. Click that (I guess it will require administrative permissions).
Yes, you can shrink both the drives with all of your data remain as it is, but it is always advised to make a backup of important data before doing anything like this.
In that, choose the partition (from which you want to extract free space as a separate partition). Right click it and choose 'shrink drive'. You'll get another dialogue box that will show you much space you can use in the new partion.
After that, you can leave the new partition as unallocated or can format it, but please note that windows will format it in ntfs (or FAT) whereas (what I have observed yet - though I may be wrong here) Ubuntu will require ext3 or ext4 file system.
Now, to install Ubuntu, you will require at least two partitions, one for swap-memory and the other where you will install ubuntu. And it is advised to keep the size of swap 1.5 to 2 times your RAM, I suggest you to make another partition of appropriate size with windows only.
In short you will require two partitions - 1. Swap - about 1.5 - 2 times you RAM and 2. Partition to install Ubuntu.
Please note that GParted is an excellent partitioning tool but I am telling you so, just to let you know that there is something you may feel yourself comfortable with, in windows itself.