USB booting :: Freecom Classic 160gb USB HD

Is it possible for me to use my Freecom Classic USB HD? Also i'm planning on partitioning this drive, i have a few questions.

Will i lose the information on the drive if i partition it? (i'm only using about 50gb on the drive, which i really don't want to lose)

Also what do i format the drive to? does linux use Fat32/NTFS or some other random crazy new thing i don't have a clue about.

Also if i booted up with the Live CD, is there a way i could copy/install DSL onto the new partition??

Thanks for your help guys.

original here.