issues with partitioning, restoring OSX

My (summer 2008) MacBook is dual-booted with OSX and Windows XP. Or I should say it was. I plan on selling it soon so I backed up my important files and did a Zero Out Data sweep in hopes of removing any sensitive information.

I'm the kind of person that would rather attempt trial and error before conceding to follow some step-by-step guide. But this time it cost me. I deleted my OSX partition and am now left with Windows XP. When I boot from my OSX install disk it eventually asks me where I would like to install the OS, but only offers me a choice of the (25gb) Windows partition. I see no options listed that suggest how to create a partition at that point.

So I assume I need to create a partition from within Windows first. I went to Administrative Tools > Disk Management and found a list of several partitions. Two of them are around 200MB in size but the other two are ~25GB and ~125GB. The latter is obviously the remnants of my OSX partition but when I (right-)click on it the only option offered is to delete it.

At this point I realized my trial and error method might hurt me further so I thought I'd ask you lovely folks for assistance. I'm actually quite new to computers and even more unfamiliar with technical actions like this (especially on a Mac). I would greatly appreciate any help.

Lastly, I have no issue with deleting my Windows partition if necessary