TL;DR: Install Now doesn't act, it only takes you to the next screens where you can configure your install.
I downloaded the Windows 8 consumer preview 32-bit ISO, intending to install it in dual-boot config with existing Windows 7 but instead of offering the Install on another partition option, it only presents a SINGLE option: Install Now.
That option is when you didn't download the ISO and is there to make an USB drive, you just need to click
Install Now instead which will launch the installer as usual. Then, continue from step 7 and select the partition.
Here is a set of screenshots, note that after clicking
Install Now and typing in the serial number you can chose whether to do a custom install or upgrade. In this case the guide has chosen for an upgrade, but if you read the text for the custom install it says that you can choose the partition.
Don't worry! The install is pretty clear and does ask you for the details...
Here is the full installation progress:
What is your culture?
Enter the product key to activate Windows.
What do you want to do?!
Let's do a Custom Installation.
Clicking Next on this screen means no going back... :)