#1 If you want a 'live' distro that you can run off a CDrom and a ramdisk try slackware-live
. Although I would probably go with Knoppix
for a live CD.
#2 If you want to run it along with win2k try an emulator like vmware and install your linux distro on that. Bigslack won't work on an NTFS system which I think that win2k is, although win2k might run on FAT also.
#3 That is personal preference personally I only use seperate partitions for 'swap', '/boot' and '/'. Make your swap space about 2x the size of your ram. Boot is where your kernels are stored, but it doesn't need to be that large about 500MB. Your '/var' partition might want to be a bit larger with slack since it's your web server directory (/var/www) and stores all your log files.
#4 Who says you "need" fluxbox? That's like asking "I'm thirsty, do I need orange juice?" No, there are many window managers for you to choose from as are there beverages. If your distro doesn't contain a certain distro you can always install it later.
I hope that answers your questions.