Here's how I resolved the issue #1 you're having. My wireless LAN is set to WPA2-PSK, so your mileage may vary. I created a wpa_supplicant.conf file, using the one in BT as a guide. I used the wpa_passphrase program to generate the value for the psk entry. I then made a simple 2-line script to get me online wirelessly:
sudo wpa_supplicant -B -Dwext -iwlan0 -c/etc/wpa_supplicant.conf
As far as issue 2, it's been awhile since I installed BackTrack, but I recall being able to set the space via slider bar during install. You may need to use something like gparted to resize your BT partition.