System Image Problem

That's ok - look at Disk Management Disk 1

All it is saying is that you need to give it a drive letter

Go ahead and assign that partition a letter
Disk Management
Right click the 450 MB partition on Disk 1
Select Change Drive letter or path
Press the add button
accept what ever letter is offered.
Post a disk management screen shot again

Ok, good

Since the drive / partiton was changed, you have to close Macrium
I don't think refresh updates the disk list

Launch Macrium again - this definitely refreshes the disk list

Remove the tick marks from all drives and partitions

Then place a tick mark in ONLY the 450 MB partition (Disk 1 E: )
Post a new screen shot of Macrium

That looks correct, only the E: partition is selected

Press Image this disk...

The next screen asks you what you want to name it and where you want to save it.

Post a screen shot of that screen - please

Remove the tick mark from Use Image ID as filename

Give it a more meaningful name: 0_sysRes

edit: I forgot to change the result in the screen shot - it should read G:\Macrium\0_sysRes.mrimg

Press the Next > button

Post a screen shot of that screen - I think it's a confirmation