The only issue and it may not matter to you, is that you are putting your entire linux system in one partition rather than in a few. Where is your swap going to be? Does partition 1 and 2 take up the entire drive? If it does not and you have plenty of room elsewhere, then put linux boot in hda1 and then put the rest in extended partitions.
hda1 - linux boot
hda2 - win2k
hda5 - /swap
hda6 - /usr
hda7 - /home
When you make a partition, click Preference and select extended to put it in a linux extended.
Afterwards, never never use win2k's disk manager to make any changes. You will lose it all..