Free Space Partition

I think you cant install it on there, check the Erase tab, if you can erase that partition from there but I think it wont be available, I think only HFS+ partitions types are valid for that, not free space.
Typically you need to create an HFS+ partition type, not an emtpy partition type, you can do that with windows I think but I dont know the exact details. You can do it with third party partition managers like Parted Magic (you can create HFS+ partitions straight) or Acronis Disk Director (you can create custom partition types, you need to create one type 0xAF IIRC, it will show as a weird name, but as long as its 0xAF type its alright).

You want to run Disk Utilities, it should be in the pulldown to the left of help (I can't remember the name)

I think this will help you get to the window picutred above.

@SportsGuyI finally got my dvd to boot up, and now am looking to install leopard. I made a partition in Windows before, and it is set as unallocated. When I boot up the dvd, there are all of my partitions, but the one I made for os x shows up a "Free Space" Is there anyway to use this to install it?