Linux for dummies - where to start

I disagree completely. Virtual machines are for running operating systems the user really, really hates to use, or Windows.

Well, maybe... I know absolutely nothing about people who prefer Metro/Modern. I do know one person who prefers Unity though -- he comes from OSX.

I recommend using 12.10 (current) instead of 12.04 (LTS, long-term support), however either will work.

Kubuntu is currently more popular than Mint/Mate combination, and I recommend it over either regular Ubuntu or Mint. Really, Kubuntu is Ubuntu with a different initial set of installed packages, you can install Ubuntu and turn it into Kubuntu and vice versa by adding packages. Kubuntu has KDE as its primary desktop, as opposed to Unity in regular Ubuntu.

Other popular options for desktop environments are GNOME (at version 3 it went into the same direction as Windows 8, causing massive exodus of users), Mate (independently developed continuation of GNOME 2), XFCE (more lightweight, less eye candy), LXDE (even more lightweight) and even Window Maker (extremely so). There are more, but I would not recommend them as a general-purpose desktop.

Ubuntu has very clean update procedure between versions, so for desktop users 12.10 should be perfectly fine. This is what I run on my laptop (as Kubuntu).

You can dedicate a partition to Linux, and Ubuntu/Kubunty installer includes partition editor for that very purpose. Separate drive is an easier solution, but either will work.

Linux can see Windows partition and files on it, however access to those files is slower due to a translation layer (FUSE ans userspace application) used to support NTFS. Root and home directories must be on a Linux native filesystems (usually ext3 or ext4, you have to use ext4 on SSDs to use SSD-specific allocation mechanism).