You should scan through the wiki (above) installation section, but probably the easiest/closest to what you want to do is the “dual-boot with Ubuntu”. Basically, you install to the partition from the backtrack live-CD and then modify the grub boot loader control file (menu.lst) to boot backtrack.
Possibly. I haven’t worked with backtrack, so I cannot say. Take a look also at the “live install, dual boot” section in that wiki - it appears the iso can be copied to disk, mounted as a loop device, set up in the grub menu.lst control file, and booted. Sorry, that’s all I can offer . . . perhaps someone else who has worked with it can help.