|Go to Windows Disk Management and post all you see there for that hard drive. I suspect you need to partition and format the unallocated space. You can keep it as a second partition with a different drive letter or you can merge it into the primary partition.|
I recommend you keep it separate. You may even want to create more than one partition with the unallocated space.
How large is the C partition now?
Windows 7 has the tools to do what you want without using a third party program.