For some reason, this thread reminds me of another one recently. Maybe I am just getting old...
I am trying to follow your scenario and see where the boot files might have been removed from your hard drive, but I don't see anything obvious. Was there anything done you have not mentioned?
The 200 MB or 300 MB partition, which is active, is normally placed on a Windows 7 install, unless you format the drive ahead of time. It is normally the system partition and contains the boot files. The OS files are on the next partition, as seems to be your setup.
Using a third party partitioning software can lead to some strange problems. So we will have to see if we can straighten it out.
Can you remove the drive letter from the first partition? Can you change it to something like Z: ?
Do you have a Windows Install DVD you can boot to, or can you download and burn one? If you do, we can use Diskpart to make changes to your hard drive.
Most of the third party partitioning software will require you OK any changes you request to be made. Just telling it to make the change, may not be enough. Or you may have to make the first partition inactive prior to making the second one active, but I feel we need to leave the first partition active.
If you are doing it correctly, and it will not stick, I must assume the OEM recovery utility is resetting the system.
Can you take a picture of the erasus window and attach using the paperclip? Some Third party partitioning software will allow you to save screenshots.