Problem is, can I install vector inside a folder on an existing partition, is mandatory to create a seperate partition or use a whole partition for it.
Not really. There used to be a distribution called DragonLinux which employed this method, but it is to my knowledge no longer available.
What you might try instead is to install VirtualBox
and then run Vector as a guest OS.
Secondly, should i necessarily create a paritition for swap separately, cant it be done like in windows where the page file does not take a separate partition?
Adding a swap file is quite easy in Linux.
First you have to create a file (one filled with zeros will do):dd if=/dev/zero of=/swap.img bs=1024k count=256
The above command will create a 256 Megabyte file in the top-level directory. You will want to be 'root' when you create it.
Second, you format the file as swap:mkswap /swap.img
Finally, you add the following line to your '/etc/fstab' file:/swap.img none swap sw 0 0
Executing 'swapon -a' will then activate your swap file.