They've made Windows 7 partition Logical so that you can add as many Logical subpartitions as you wish, otherwise you'd be stuck with 4 Primary which would convert to a Dynamic disk (meant only to span partitions on multiple HD's) if you tried to add a fifth Primary - a real mess we clean up here regularly. It doesn't mean anything except that you'll need a boot partition (SysReserved) unless and until C is converted to Primary, marked Active and the SYstem boot files are written to it by running Startup REpair a few times.
For now, I'd boot the Ultimate DVD and install to D. It will autoconfigure a Dual Boot with Starter and see Ultimate as C when booted into it.
Later we can show you how to easily remove and recover the space for Starter when you realize there's no reason to keep it, along with the Recovery partition once you figure out a way to make the CD's or flash stick to have in case you ever want to restore to factory condition to use your Ultimate elsewhere. Of course you can always clean reinstall Starter with the Product Key on its COA sticker by unlocking the Ultimate DVD
Adapt the steps for getting a perfect Ultimate install here: Perfect Reinstall