Linux uses the standard PC partitioning scheme, so it can share your disk with other operating systems. This was integrated into the standard kernel in version 1.3.60. Not very easily. There is a module available for the Linux kernel which can do read-only access of the compressed volume. Yes, but it's only read-only at the moment.
More information is in affs-readme in the tarfile.
Recent kernels contain support for the UFS filesystem used by System V, Coherent and Xenix. This is being turned into a kernel module, which is available on sunsite . There is a project, known as WINE, to build an MS Windows emulator for Linux, but it is not ready for users yet. In the meantime if you need to run MS Windows programs your best bet is probably to reboot when you want to switch environments. Add the partition to the Boot Manager.