As stated I believe if you were to choose those two partitions shown in your screenshot that Win7 backup imaging would reimage them to the exact same spot on HD. You'd need Macrium or one of the others to be able to choose more flexibly where you want the backup image placed.
Of course you can always use free Partition Wizard
bootable CD to Resize, dragging both partitions to the left side of HD, then resizing C to desired size. However this lack of flexibility causes many to choose another freeware, or even a premium app like Acronis.