When you erased the XP drive, you probably removed the boot files for Windows 7. As bassfisher recommends, disconnecting the other drive usually simplifies things during an install. If you know how to set a drive to primary in the bios, you might be able to do that.
Then do a Startup Repair on Windows 7. It will usually take 3 runs to repair the system, but there has to be an active partition somewhere on the system. It would be good if the Windows 7 OS partition is the active one, but that will be up to you.
If you try a Startup Repair and it runs for a really long time, there may not be an active partition.