I actually did the same just yesterday on my brother's laptop (clevo machine with a 300GB HDD):
- I first installed Windows 7 on an NTFS partition with 170GB of space.
I also created a second NTFS partition as a backup with 100GB of
space, leaving 30GB totally unconfigured/unpartitioned for Ubuntu (170GB C:\, 100GB
D:\, 30GB # future Ubuntu partition #)
- I booted up from the Ubuntu CD and when the installation proceeded to the
partitioning/drive space allocation options, i was presented with the following screen:

- I just selected the first option
Install Ubuntu alongside Windows 7.
When the setup completed, i just rebooted and everything was ok.
Grub installed, dual boot working just fine ;-)
If you want to change the default O/S when booting, you can do one of the following:
The "hard" way:
From a shell, type:
cat /boot/grub/grub.cfg | grep menuentry
You will get a list of all the entries in your grub menu.
Count them starting by zero (0), e.g.
menuentry 'Ubuntu, with Linux 2.6.38-10-generic' .... <-- #0
menuentry 'Ubuntu, with Linux 2.6.38-10-generic (recovery mode)' .... <-- #1
menuentry 'Windows 7' .... <-- #2
Then, edit /etc/default/grub and change the entry GRUB_DEFAULT=X to the number you want (like #2 above for Windows).
Save the file and do a sudo update-grub in order to update grub.cfg.
You're all set.
The "easy" way:
Install StartUpManager by typing:
sudo apt-get install startupmanager
This application provides a GUI in order to make all the changes you need.
More information can be found here