Hi CsGreen,
I need to have you clarify
"When i am prompted to select the disk partition to install Windows on my MacBook Air i do not see a BOOTCAMP partition"
You could be referring to the Mac Bootcamp utility screen where you size the yet to be created partition, or to diskutility in OSX after you thought the partition should have been created.
or
You could have been referring to the First windows screen after Bootcamp booted and windows setup started.
The next statement "and i get an error if i try to use partition 4 that Setup was unable to create or locate a partition" is hard to understand the compressed multiple statements.
When the windows setup cd starts, after bootcamp utility has created the partition and reboots, should show a "bootcamp" partition. if it does not, then that may indicate bootcamp failed to partition the disk. Where in this process do you first see an error.
Windows setup will error if no suitable drive is available upon which to continue the install. You should only attempt to install onto the partition that windows setup reports as "bootcamp"
if you see this created partition labeled "bootcamp", then consider if you remain confused, abort and take it into an Apple store. if you are following directions, have clarity, are no longer confused consider selecting it, click advanced options and format it from within the windows setup utility. The setup should then continue normally.
This last step is destructive to the existing OS files, applications, data and documents do it with ample correctness and clarity.
Have a full back up before you begin. Follow all vendor advice over all forum advice.
Hope this helps
Chuck