No problem, boot up into your current OS. When in there, make sure you have formatted the target partition and set it as an Active one.
Insert your Win 7 program disk and navigate to it on your DVD drive using Win Explorer. Click on the setup.exe and the installation will start. Because you are already in C: (and it's therefore locked) the installation will go to the target partition you want, just indicate which partition as you go through the installation process.
I have C: with Vista and G: with Win 7 and every works just fine. New program that you install if you select the WIn 7 option on boot up, will go to G:\Program Files, or whatever drive you have designated.