How "Install along side Windows" option works

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http://askubuntu.com – I have created an unallocated space of 10gb on my HDD through Windows. I want to know how does the option "Install along side with Windows" of Ubuntu 12.10 work? Will it use the unallocated space or will it ignore it and try to create a new partition, taking space "randomly" from the drive? Regards (HowTos)