Is it applicable to use drive d for dual boot?

Hi all,
My Laptop computer is copyright Windows Vista Premium and I am planning to dual boot Windows 2007.
But my drive d is almost full as you have seen image below;

I'm confused because, if I use the drive d as Windows 2007 it maybe conflict and damage the program because drive d is use as Recovery. And the size itself is too small and I’m planning to replace the recovery into other drives to be created.
Is it necessary to replace the Recovery drive to other drives? So that the windows 7 will be place in my drive d.
Any help please?
Thanks for help.
