Ubuntu – Dual Boot Installing Ubuntu 12.04 with Windows 7 (64) on a non UEFI system fails

I guess the original poster is not going to change his mind about the conversion after reading my post :-) But since the question is up-voted, here are some hints:

The first partition is more likely to be a Windows-specific "system" partition, particularly if it is NTFS-formatted (the EFI partition should be FAT-formatted to be useful to the largest number of systems.)

EFI systems using MBR-formatted disks often boots using "legacy mode" (Compatibility Support Module), so to all effects, they appear to the OS as BIOS systems, not as EFI ones. In the case of Windows, the boot process of the operating system itself, after the boot manager, is a bit different (winload.exe against winload.efi); so fiddling with it is a bit risky. In addition, you need to add a EFI system partition which is presently missing (although reconverting the SYSTEM_DRV can be used for that purpose, it is not straightforward.) Furthermore, the recovery system provided by the vendor will blindly assume the computer operated in BIOS mode, so running it even by accident is likely to make things worse, not better: so it should be removed, which means removing one more safety mechanism in case something unexpected happens.

Since BIOS is better understood than EFI, it is therefore recommended to either consider the system as a purely dispensable experimentation machine (and then it is easier to start from scratch); or to stay with the original MBR formatting and BIOS booting.

Your "hidden" 1GiB partition is a Microsoft System Reserved partition. This is a Poor Man's equivalent to a system partition. It isn't a true system partition, and it isn't an EFI System Partition. The boot manager that it contains is the Microsoft Boot Manager. However it is your system partition. Delete it and your machine will be unbootable.

As described, there's no indication that your laptop actually has EFI anything. It doesn't have an EFI System Partition, doesn't have an EFI partition table, and isn't bootstrapping in the EFI way. From your description, it is bootstrapping in the old PC/AT way, with the Microsoft System Reserved partition as the "startable"/"active" partition, whose VBR invokes Microsoft Boot Manager.

(Checking with the IBM support WWW pages, it turns out that this is indeed the case. Lenovo Thinkpads with Windows 7 are installed with the firmware configured to bootstrap in the old PC/AT way.)

As such, installing Ubuntu is done just as one would do on an old PC/AT compatible machine:

1. Make a boot volume for Ubuntu, moving and resizing partitions to make room using your favourite tools.
2. Install Ubuntu, and its boot loader (GRUB2) into that boot volume. Just boot from the installation disc, and point the installation utility when required at the boot volume that you made for Ubuntu.
3. Add en entry for that boot volume to the Microsoft Boot Manager menu using the bcdedit tool. Cyril Voisin describes one way to do this, that needs to make a copy of the Ubuntu boot volume's Volume Boot Record in a file on your system volume; and so must be done after installing Ubuntu's boot loader.

You don't need to do anything with respect to the Poor Man's system volume. It remains the "startable"/"active" partition throughout. You don't need to do anything with the Master Boot Record, either. Do not (allow Ubuntu to) muck around with the MBR.