Follow these steps which are the same when dual booting two copes of Windows 7:
Dual Boot Installation with Windows 7 and Vista. Use only Primary Partitions for OS's.
Note that you are to
boot the Windows 7 installation DVD and not run it from C. This will assure that whichever Windows 7 you are booted into will show as C.
You can give each install it's own distinct name on the menu by installing
EasyBCD 2.0.2
to use the Edit OS Menu tab.
When you're ready to delete the original Windows 7, boot into free Partition Wizard bootable CD, rightclick on new Windows 7 to Modify>Set to Active, then click on Disk # to highlight it, from Disk tab select Rebuild MBR, Apply, reboot to see if new Windows 7 is now System Active. If not boot into Windows 7 DVD
System Recovery Options to run
Startup Repair - Run 3 Separate Time.
Once new Windows 7 holds the System Active flag, boot back into PW CD to rightclick old Windows 7 to Delete, then rightclick new Windows 7 to Resize, slide border to take up the Unallocated space.
If you have any problems post back a screenshot of your maximized Disk mgmt drive map with listings, using Snipping Tool in Start Menu.