You don't really need it. If you format the drive prior to installing, it will not recreate the reserved partition.
If you are using a upgrade version of Windows 7, I do not know how formatting first will effect the reinstall. You can format prior using the Disk options on the lower right of the Partitions window. But make sure your refresh so the partitions are seen.
Being the amateur I am, I was annoyed by the "System Reserved" part, so I deleted the whole partition, SSD 120 Gb, and installed Windows 7 anew - only to find that, surprise, surprise... I have a 100Mb "System Reserved" partition there. The battle against Windows 7 was lost.