What OS is on the system now and what are you upgrading to? Are you using an Upgrade version of the Windows 7 install DVD and where did you get it?
During an install, on the page after you pick a language, you can hit Shift+F10 to get a command window. You might try using Diskpart to look at the drive. Type the following commands and when done, type exit to leave Diskpart.
Diskpart
List disk
If the drive shows, can you tell anything about its status?
There have been some situations where a drive needed to be cleaned, which you can do with Diskpart, but depending on your install, it might keep you from being able to activate later.