10.10 - How to avoid problems when installing Ubuntu and Windows 7 in dual-boot?

I want to try out Ubuntu (and hopefully choose it as my primary OS). After looking at many versions of it in VirtualBox and from Live CD, I've finally decided to install it.

So I defragmented and shrinked one of the partitions to make room for Ubuntu.
My current setup (after shrinking the D: partition):

[·100 MB·] [······250000 MB······] [·······600000 MB·······] [··100000 MB···]

 Reserved   Windows 7 system (C:)          Data (D:)            Free space
   NTFS             NTFS                     NTFS              (for Ubuntu)

The Internet (including AskUbuntu) is full of scary stories about Windows not loading after installation of Ubuntu, something about installing GRUB to a wrong partition, etc.
As I am a newbie to Linux and Ubuntu, it is very easy for me to do something wrong. Please mention the problems that may appear and explain how to avoid them.

Ubuntu version that will be installed: 10.10 Desktop amd64

Please note that I have installed Windows 7 about a year ago, so I have much to lose if something goes wrong. I want to be very careful because there is no way for me to backup all the data.

Most of the scare your read about comes from an unlucky installation message from Grub that misled users to install Grub to their Windows partition boot sectors thus making Windows unbootable. As this is fixed now there is only a small risk left.

If you take care not to touch your Windows partitions when installing Ubuntu, and if you follow the standard installation process provided with Ubuntu you are on the safe side.

As always when installing a new OS or changing partitions backing up your data is absolutely necessary. I'm sure you have done that already.

For deeper insights into dual-boot setups read the Community Wiki.