The problem is that your HD is Dynamic as shown.
You need to convert the HD from Dynamic to Basic from the Windows 7 DVD Command Line using the steps given here: Change a dynamic disk back to a basic disk: Storage Services; Local File Systems
This is a destructive process so back up your files. Afterward you'll need to reinstall XP if you're not ready to migrate fully to Windows 7. Try first installing your older XP programs in Windows 7 Compatibility Mode
or if necessary run them in XP Mode in Ultimate, or in a lesser version use free Virtual Box or Virtual Player.
You could also install Windows 7 to another HD to Dual Boot via BIOS.
To access the Windows 7 DVD Command Line, boot the DVD, press Shift +F10 at first screen, a Command Box should open. If not, select Repair My Computer on second screen, click through to Recovery Tools list to choose Command Line.