Three questions, three short answers:
Now the longer ones.
I do not know why this extra partition. Is it a leftover from an earlier partition? When you do know that all data on this disk may be deleted and you simply want your own partition I would advise the following:
Select that you want to do this yourself. You will get the partition table in the window. I now work from memory, so the wordings of buttons etc, may be a bit different, but I hope you will find your way.
Select sda6 and click Remove.
Select sda5 and click Remove.
Select sda3 and click Remove.
Select sda2 and click Remove.
Click Add, a new window will show where you can fill in several things. choose fstype ext3, take a size of 20GB and choose / as mountpoint. This will create sda3.
Click Add, again ext3, take all that remains of the disk and choose /home as the mount point. This will create sda4.
Look at the partition table now and remember that until now nothing realy happened with your disk, so you can always revert when you do not like it.
I think this is the partitioning as you thought you want it (which btw would also be my choice).
Carry on with the installation. Good luck.
When in doubt or when you do not understand what I told you here, post back.