Install Linux error: Could not allocate requested partitions - not enough free space on disks

Question

I'm using Windows 8.1, now for education purpose, I try to install Oracle Linux 6.5 as dual boot on my computer.
At the Disk Partition section, I found that I cannot create a Partition, both with

Use free space

and manual install.It shown the error:

Could not allocate requested partitions, not enough free space on disks

In other post, they said about the maximum of 4 MBR for each hard drive, so here is my current partitions (viewed in Paragon Partition Manager on boot CD, saw the same on Windows Disk Management, EASUS Partition Manager):

Drive 0:
Partition
0: Primary | NTFS | 150GB | Active | Not-hidden
1: Extended
2: Logical | NTFS | 150GB | Not-Active | Not-hidden
3: Logical | Free | 166GB

Unless my USB drive, which I used to install Oracle Linux is also count as a Primary partition (it really shown as Primary, though not in the same Hard drive with the other).

So how can I install it? I really dont want to remove Windows.
An additional question, is that 166GB enough for Oracle Linux and Oracle Database 11g?

Edit: Thank you, Gaurav.

Sorry if I have mistakes, English is not my first language.

My laptop system is:
SONY VAIO VPCF1
Core i7 1.6 Ghz 4cores
4GB Ram
500Gb Hard disk
Nvidia Geforce 310M

Answer 1

You need a primary partition for linux and therefore you need to delete the extended partition and make a primary one in its stead.

Answer 2

Firstly, let's clear up the four-partition thing.

An MBR disk can have at most four primary partitions. That's all. So to get round this, "Extended" partitions were born. An Extended partition is a container, which takes up one of your primary partition slots. Inside Extended partitions you can put logical partitions - and in this manner, you can have more than four partitions on an MBR disk. In your layout above, I can see your disk has space for two more primary partitions.

166GB is a lot of space for linux. It's currently, in fact, more space than Windows or any distribution of linux will require - I think Windows is pushing the 20G envelope with recent versions, and while linux distributions vary the average is less than that.

For a basic installation, if this is your first time, I'd recommend just keeping everything in the one partition. But it's not clear what manual options you're trying to use to install linux here. You're probably going to need to tell it specifically to install into that final partition, and to use only that partition, to avoid boot problems and damaging your Windows installation.