You should have your data backed up at all times externally in case of HD failure or mistakes during reinstall.
If your intention was to reinstall Windows 7 then deleting the System Reserved boot partition is fine since it will not be functional after a reinstall. Only if all partitions on the HD are deleted will the installer issue a 100mb System Reserved partition during install. You can move the data off to delete all partitions with the installer if you want this.
Or you can proceed with your plan to reinstall Windows 7 using Custom install Drive Options to delete the former System Reserved and Windows 7 partitions, then create a New partition in that space, Format and install Windows 7 there.
Clean Install Windows 7
If you want to rescue your data first using the DVD use this method:
Copy & Paste - in Windows Recovery Console
Otherwise just make sure you don't touch those data partitions while reinstalling Windows 7.