The ISO info it extracts and copies onto the USB is only about 700 MB (the size of a CD), so even if you did make a 1 GB persistent file, it should not step on your existing file(s) as long as you do NOT hit the "Format" button. Although, you should certainly have copies of your files somewhere else just in case.
Make sure that you select the partition (1) and not the drive (with no number) and that none of your existing files have the same name as directories or files in the root of the USB.
Following is an example (although this is Mint-8 based on Ubuntu 9.10), but note that my persistent file (casper-rw) is 3 GB, so for example if yours was 1 GB, you would still have 2 GB vfat space remaining that Windows could access, or without any persistence you would still have 3 GB free.
Code:
efflandt@efflandt64-desktop:/media/B69A-DC69$ df .
Filesystem 1K-blocks Used Available Use% Mounted on
/dev/sdf1 3905516 3829624 75892 99% /media/B69A-DC69
efflandt@efflandt64-desktop:/media/B69A-DC69$ ls -l
total 3125292
drwx------ 2 efflandt efflandt 4096 2009-12-19 04:15 casper
-rwxr-xr-x 1 efflandt efflandt 3200253952 2009-12-19 04:24 casper-rw
drwx------ 3 efflandt efflandt 4096 2009-12-19 04:15 dists
-r-xr-xr-x 1 efflandt efflandt 14607 2009-12-19 10:14 ldlinux.sys
-rwxr-xr-x 1 efflandt efflandt 3541 2009-12-19 10:14 md5sum.txt
drwx------ 4 efflandt efflandt 4096 2009-12-19 04:15 pool
drwx------ 2 efflandt efflandt 4096 2009-12-19 04:15 preseed
-rwxr-xr-x 1 efflandt efflandt 222 2009-12-19 10:14 README.diskdefines
drwx------ 2 efflandt efflandt 4096 2009-12-19 04:15 syslinux
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