you don't actually have to partition, but it is a good way to organize your stuff. Besides, if you keep your install files (f.i. windows dir) and your personal data on separate drives, you can format one, without having to do a painful backup. You can backup on the hdd itself, for the same reason.
They used to say your promary had to be the biggest, but with large disks today, I have system partitions smaller than data partitions, and everyhting works fine. So I guess you can do whatever you want.
With 10 GB, I would say a c: with 6 GB and a d: with 4 GB. But of course, that's and advice, not a rule.
Fdisk doesn't give you a lot of options (at least, not the win98 version). Enabling Large disk support is necesary when you have a large disk (which you do), so 'Y'. When using fdisk started by the serup, you will create just one partition. You can use partition magic pro 7 from powerquest, to add another one later or you could boot your pc and make them yourself directly in fdisk.
Type fdisk after boot. Create a primary (f.i. 6 GB), create a logical with the rest of the amount of data and in that logical you create and extended partition.