You need to free up some HDD space by using a utility like GParted
http://gparted.sourceforge.net/download.php
Then slip in the Fedora Install Disc boot off that and install it to the unused part of the HDD.
Though as you have 7 Premium it would probably be easier to just run Fedora Virtually under 7 as I seem to remember that this version of 7 Supports Vitalization, so if the hardware supports it as well it would be easier to do things that way. ;)
As for the Dell Partitions the Recovery Partition is both the Root of the Drive and the Primary Partition so that Initial Boot Files are stored on that part of the HDD. So what happens is when you start the system after it POST's it looks to the Primary Partition sees the initial files which tell it where to find the OS and starts the Boot Process. If you set the 7 Partition to Active this messes up the Path that the computer looks at to load the OS.
Col