Create an extended partition, then you can create logical partitions. I don't know if Windows 7 will install on a logical partition though
Explanation: (from Wikipedia - Disk Partitioning)
This section describes the master boot record (MBR) partitioning scheme, as used in DOS, Microsoft Windows and Linux among others on PC
compatible computer systems. For examples of partitioning schemes used
in other operating systems, see the general article on partition
tables.
The total data storage space of a PC hard disk can be divided into at most four primary partitions, or alternatively three primary
partitions and an extended partition. These partitions are described
by 16-byte entries that constitute the Partition Table, located in the
master boot record.
The partition type is identified by a 1-byte code found in its partition table entry. Some of these codes (such as 0x05 and 0x0F) may
be used to indicate the presence of an extended partition. Most are
used by an operating system's bootloader (that examines partition
tables) to decide if a partition contains a file system that can be
used to mount / access for reading or writing data.
Primary partition
A primary partition contains one file system. In DOS and earlier versions of Microsoft Windows systems, the system partition was
required to be the first partition. More recent Windows operating
systems (Win7, XP, etc.) can be located on any partition, but the boot
files (bootmgr, ntldr, etc.) must be on a primary partition. However,
other factors, such as a PC's BIOS (see Boot sequence on standard PC)
may also impart specific requirements as to which partition must
contain the primary OS.
The partition type code for a primary partition can either correspond to a file system contained within (e.g. 0x07 means either
an NTFS or an OS/2 HPFS file system) or indicate that the partition
has a special use (e.g. code 0x82 usually indicates a Linux swap
partition). The FAT16 and FAT32 file systems have made use of a number
of partition type codes due to the limits of various DOS and Windows
OS versions. Though a Linux operating system may recognize a number of
different file systems (ext4, ext3, ext2, ReiserFS, etc.), they have
all consistently used the same partition type code: 0x83 (Linux native
file system).
Extended partition
A hard disk may contain only one extended partition; the extended partition can be subdivided into multiple logical partitions. In
DOS/Windows systems, each logical partition may then be assigned an
additional drive letter.
Basically, you can have 4 "real" partitions on a disk; to get more, you make up to 3 Primary partitions, then 1 "extended" partition that has multiple "logical" partitions inside of it. The extended partition does NOT get a drive letter, but the logical partitions inside of it would get letters if assigned
