Hi Gav,
I'm not too familiar with Basilisk, but it should just be a matter
of creating your partition using the Basilisk "prefs", allowing the
"Mac" to format the partition next time the emulator is run, and
then copying your wanted files from the hardfile to the "real"
partition (on the "Mac" side, of course). Any partition that contains
a "System" folder can be selected as the boot partition in the prefs.
Check your docs for specifics, though.