It sounds like the boot files Windows needs were installed on a System Reserved partition on the small drive and all the Windows system files were installed on the C: drive.
This would mean the small drive has been flagged as ACTIVE and the C: drive is not. You would need to mark the C: drive as active in Disk Management before doing the process described below. Do not mark C: as active unless you are going to remove the small drive.
You can correct the boot problem by uninstalling the small drive and then boot with your Windows 7 installation DVD (DVD first in the boot order) and run Startup Repair 3 or 4 times. Startup Repair - Run 3 Separate Times
This will install the correct boot files on the C: drive so the system will boot without the small drive attached. Then you will need to un-mark the small drive as ACTIVE and format it again to erase the old boot files.
And just to be sure: you are talking about 2 separate, physical hard disk drives, right?
Not to be confused with 2 "drives" that are actually partitions on one physical hard disk drive.