Are those
driver letters fixed or does the OS you are booted into always show as C as it should?
If not, you apparently didn't boot Windows 7 to install it but ran it from XP which was already holding C and thus blocked it's use by Windows 7.
In the future, always boot the installer to install an OS so when booted into it on a multi-boot it will show as C. You must do this anyway to install a different bit-version, of course.