Install question about partitioner behavior

[p.echols at comcast.net]

I am installing Karmic on a new netbook.  

I want to leave the windows 7 partition for now and resize.  I also want to create a separate "home" partition.  

If I use the manual partitioner, select the windows 7 partition, it does not explicitly say that it is going to resize the partition.  Instead I get a dialog that asks for partition size, how I want to use it, (default "is do not use") and offers to format or not.  Obviously I do not want to format, but does anyone know whether this action will resize the existing partition?

Also, what is the "default" ubuntu file system. still ext3?

Thanks

--PE