>From reading on the web (http://www.youtube.com/watch?v=VpipA-_3nSs), I
assume that the best way to getting back to Debian is:
1) Set up partition from within Windows
2) Install Debian live and then follow the instructions as normal. Or is a
debian netinst fine.
Given that
a) I would like whole disk encryption for my debian data (client data) and
I intend to back up every night to an external hardrive
b) I have spent hours getting Windows updated and I do not want to use
system restore on windows
At a glance, it sounds like you've got everything covered. If you're going to dual boot, life is a lot simpler if you install Windows first, which you've effectively already done. Creating a partition for Debian shouldn't effect the data on the Windows, so you're existing installation shouldn't have anything to worry about. I know historically people used to recommend you defrag the windows partition before you resize partitions, but I'm not sure that's needed any more with modern versions of NTFS.
Personally, I like to install from a live disc rather than relying on a netinstall. That's down more to the unreliability of my internet connection than the quality of a netinstall. Live CD is only about 700MB, which isn't a lot these days, and grabbing the whole CD first means I can use torrent to make sure all the bits are there and in place. If you're connection is stable, then there's no reason not to go with netinst so really just go with whichever you like.
As for whole disk encryption, I'm not familiar with Debian, but every other distro I've used in recent times presents that option during installation, so I would expect Debian does the same. The release notes will confirm that one way or another. Don't forget that this won't encrypt the Windows partition, so any data there will still be vulnerable.
While we're on the subject, maybe some one here can educate me on what the point of encrypting the entire file system is as opposed to just encrypting the home directory?