By default, it will erase you disk, but the installer will ask you if you want that before it does it. The default answer is "yes" so be carefull to read the texts. If you answer "no", the installer will ask you about partitions. There is no support for resizing existing partitions in the installer so you'll want to do that with a 3rd party utility first. You also have an option to use unallocated free space if the installer finds unpartitioned free space on disk. Since you're going to use a custom partition model, you could also make just two partitions: one mounted in / and one for swap instead of Pluto's 3 partition model (/ , /home and swap). Be sure to make it big enough (>20 GB) since, in its current form, Pluto is disk-space-hungry.