Xubuntu 7.04 installation does not detect existing partitions

I am facing couple of issues with Xubuntu 7.04 installation. Here is my setup...

1) I have an old machine - 400 MHz Pentium II with 256 MB RAM and 20 GB hard drive.

2) First, I partitioned my 20 GB hard drive using fdisk as follows...
Primary partition C: - 8 GB
Extended partition
    Logical drive 1: 6 GB (will use this for "/")
    Logical drive 2: 1 GB (will use this for "swap")
    Logical drive 3: 6 GB (will use this for "shared")

3) I installed Windows 98 on primary partition. Everything works fine.

4) I burnt the Xubuntu 7.04 Desktop CD using the .iso from this location - http://cdimage.ubuntu.com/xubuntu/releases/7.04/release/xubuntu-7.04-desktop-i386.iso

5) I booted using the Xubuntu Desktop CD. Xubuntu menu shows up and I verified that the CD is okay. I then clicked on the first link to launch Xubuntu from the Desktop CD.

Here are the issues...
1) I am assuming the Xubuntu Desktop CD is a "Live CD". I see the following icons on the desktop - "Windows" (which is my C: Win98 installation", "Floppy drive", "Trash", "Home", "File System", "Examples", "Install".
I don't see any menus at all. Shouldn't I see a menu bar at the top and bottom with "Applications" at the top? I used to see it with the Xubuntu 6.10 Desktop CD. Is there a bug in the Xubuntu 7.04 Desktop CD?

2) I clicked on "Install" to start the installation. On the "Prepare disk space" screen, I selected the "Manual" option. When I get to the "Prepare partitions" screen, it does not detect my Windows partition and the 3 volumes on the extended partition. It wants to partition the entire disk.
The Xubuntu 6.10 Desktop CD detected this scenario without a problem and I was able to format the "/" and "swap" partitions as "ext3".
Is there a bug in the Xubuntu 7.04 Desktop CD?

I am stuck. How do I proceed? I am hoping the answer is not "use the command line installer". The GUI partition tool in Xubuntu 6.10 seemed much better.