Linux for dummies - where to start

you got a few sensible remarks already, but here's my 2 cents. I love using linux, and have used it for quite some time now. What I mostly notice is that people that begin with linux shouldn't be to worried about the'installation' in itself, but more on which flavour of linux they are choosing to work with. There are beginners distro's that have most things preconfigured and work out of the box, and at the other end of the scale there are the modular distros that allow you to build a customized linux from scratch. The biggest choice people face is what 'family' of linux they want to use (Debian, Slackware, Redhat, see the linux wikipedia page for a list of distro's), and what kind of desktop environment you want to run on there (full blown environments like Gnome, KDE or XFCE, hybrids like Mate or Cinnamon, only a window manager like Enlightenment and so on)

Those choices will massively determine your path along the linux road. The modularity is a blessing because you can lego a system any way you want, and at the same time it is a curse (for new users mostly) because there is so much to choose from.

If you are looking for a beginners distro I would suggest something out of the Cannonical family (Ubuntu and its derivates like Mint). It's not bleeding edge, but its well made and preconfigured in such a way you don't have to bother too much changing things. Me for myself, I love Cinnamon as a desktop (it's a Gnome3 spinoff), but that's still under development. Ubuntu uses Unity now as a desktop, it's has had a lot of critics but if you are not used to any other desktop it's OK I guess... And Ubuntu has a lot of tuts and support written out on the internet.

If you don't really know what linux you like yet, I would suggest that you use YUMI (it's a windows tool to make a USB with live distro's) to burn some live distro's to a USB, and start fiddling around in Live mode. That way you don't have to install anything (yet), and you will learn a lot. If you have made your choice, you can install that on the actual machine.

And for your questions:

dual boot is the best way to install linux (Ubuntu anyway). all goes automatic, but your current partition would have to be shrunk. So make sure it has enough empty space, ditch some windows programs and files if neccesary, and do a defragmentation in windows. After that, things should be a breeze. The Linux will install it's own bootloader (Grub2 it is called) that will autodetect your OS's and list them automagically. When linux updates it's kernel, the entries are updated automatically to reflect the changes and use the newest kernell with fallback possibilities to older ones.

On new systems I install for dual boot, I always make sure that I have partitions of about 80 GiB for the OS's, and a big fat NTFS partition to act as a shared storage. That's handy, because linux can read the windows partition (FAT or NTFS), but windows cannot read the Linux Ext3 or 4 filesystem.

Running it in a VM is an option, but not a very efficient one. Windows is quite a resource hog, and if you run Gnome or KDE full blown you would need to have 3d support in graphics and you would need to share your other resources. Also it's a bit of a pain to set up the networking between windows and linux in the VM, if you are a beginner you'd probably get stuck there. Dual-boot is so much nicer.

Your KVM shouldn't be a problem, but you could also put the box away somewhere with an ethernet cable on it, and set it up for remote desktop. Then you use a VNC client to control it. Remote desktop functionality is standard in most linux distro's.

As much as I love Linux, I still am addicted to photoshop. But that's practically the only thing I HAVE to use windows for... But I am sure that GIMP can be just as efficient, or you could use online editors like pixlr....