gregrocker said:
What happened here is that Win7 installation media was run from XP so that the C drive (XP at the time) was blocked from being used and it assigned another letter. This is why Win7 installation media should always be booted to install the OS, not run from another OS.

So you're stuck with Win7 on Z. If you don't mind this then you can leave it that way, but it first needs to be made bootable without relying on the System files now on the XP partition.

As Brian said, this is achieved by Marking Win7 Partition Active then running Startup Repair - Run 3 Separate Times to write the System boot files to Win7 until it boots and holds the System flag.

To do this there are several steps which must be performing in order as follows:

Download Partition Wizard boot CD ISO, right click to burn to CD with Windows Image Burner, boot the disk: How to Boot A Computer from CD or DVD - YouTube.

Rightclick on C partition to Modify>Set to Inactive, click OK.

Next right click on Win7 partition to Modify>Set to Active, click OK. Apply both steps.

Now power down, unplug DISK0, swap it's cable to Win7 hard drive so it becomes DISK0. Leave C drive unplugged for now.

Boot into Win7 installation Media or System Repair Disk to run Startup Repair - Run 3 Separate Times until Win7 starts and holds the System flag.

You can then plug back in the other HD, boot back into Partition Wizard CD to delete the XP partition and if desired recover its space into Win7 partition using Partition Wizard Resize Partition - Video Help.

There is one other problem with your install: Program files should not be broken out onto another partition since they write registry keys to Win7 which integrate them into the OS until they are uninstalled. So I would strongly consider reinstalling from the booted Win7 installer to delete all partitions, create New as desired, then Clean Install Windows 7 correctly.
Thanks Greg for a really greta explanation I shall remember this for the next time