Haven't tried the new PM 7.0, but they all work the same way, you have to do the following steps :
1. Select partition with available space
2. Resize it to create some free space for new partition
3. Create new partitions using free space
it's all done from comfy & simple interface, so you shouldn't be confused and there always undo option.
now, as previously mentioned I don't know much about mandrake, but for linux you usually have to create 2 partitions :
1) Linux partition (~2Gb for start)
2) Swap partition (200 Mb max).
Now, things probably changed since I've installed it last time, so I can strongly recommend you to ask for advice from
www.mandrake.com support team, they know all you need
Installing mandrake is obviously not as simple as just creating partition, so you'll need advice from them, after all, quality support is another great things in Linux world. (ding ding ding micro)
Good luck
Chef