I do have XP on my PC. I want to shift to Ubuntu 10.04. I want to format whole PC & want to keep only Ubuntu.
Should I have to keep partition for it like we do in previous version of Ubuntu. Doesn't it waste my space ?
"Use the entire disk" is definitely the option you will want to use. However, note the following:
If you can backup/export your data/bookmarks/settings/etc first, and can put them back manually, this is the way to go. It will also avoid GRUB problems you may encounter having an XP machine as well.
If you want to test the water first, and see how it is, install it co-located with XP, and once it is fine, having imported your preferrences, bookmarks, etc. You can then copy your entire /home/username/* into a USB disk using tar, and re-import it once you re-installed Linux on the entire disk. Look at the commands tar and gzip to compress everything to a single large file.
If you are not happy with the default partitioning, you can then go manual, where you can first delete everything from the existing XP, and create different partitions, each with their different mount points. Some people prefer to separate directories such as /var from others, as they can grow up faster than. say, your home directory, or your application directory. This can avoid filling the disk with files that could cause problems to your applications, for example.
Be careful when you select your disk to install to. Make sure you have only this disk available/connected. Otherwise, if you do not select the right disk (and this happened in a USB environment), you may erase your external drive instead.
BACKUP BACKUP BACKUP BACKUP !!!!!!!!!
Update: Fixed two typos.
I think you can just run the installer and choose the "Use Entire Disk" option when it gets to the partitioning section.
There might be an optional choice to use LVM and thats up to you but the "Use Entire Disk" (paraphrasing) should be the one you want. It'll appropriately allocate the swap and operating system partitions as necessary.