The second partition is optional. It is called an extended partition. This is the space left over after the primary partition. First you have to setup a primary DOS partition. Choose Option 1 in the next menu.
Many people just make the entire drive one partition just to stay simple.
If you want to break from this norm, specify the amount of drive you want to partition in either megabytes or percentage of total drive. Next, you'll need to make this partition active. Follow the prompts. Plug in the percentage of drive to partition for this one. Do not make this partition active.