|Did you create your restore disks of Windows 7? If not, see if you can still do that. |
Back up your personal files somewhere. External HD, DVDR, etc.
Then delete all partitions using a third party tool like one from the hard drive manufacturer. That way, you will eliminate 2 partitions. Using Windows installation process will create that reserve partition, which most users don't need.
All you really need to create is ONE primary partition for Windows 7 of sufficient capacity. After you have Windows 7 up and patched you can create additional partitions from Disk Management.
BTW, you can't convert dynamic back to basic.