delete 100MB labelled as System Reserved

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The 100MB volume is labeled as System Reserved with NTFS file system, and System, Active, Primary partition attribute with no drive letter in Disk Management. The 100MB system reserved partition is only available for Windows 7 Ultimate, Windows 7 Business and Windows 7 Enterprise editions. The 100 MB system partition is used primarily as BitLocker partition for BitLocker encryption. Additionally, it also holds the Windows Recovery Environment (WinRE) and boot files with boot manager for booting up the computer for troubleshooting when there is no Windows 7 installation DVD disc on hand.

The Windows 7 created 100 MB partition is not the main boot partition or boot drive, but serve only as a backup. The following files and folders are the initial content of the partition (names in [] brackets indicate it’s a folder or directory), before BitLocker is enabled and in use.

[$RECYCLE.BIN]
[Boot]
[System Volume Information]
bootmgr
BOOTSECT.BAK

For Windows 7 users who do not intend to use BitLocker, the 100 MB partition can be removed subsequently and easily in Disk Management, the built-in partition manager of Windows 7. However, users can stop and prevent the 100MB partition from been created in the first place during installation of Windows 7, via several workarounds and tricks or hacks. These hacks have slightly different from trick used to remove 200 MB partition in Windows 7 RC or Beta.

Method 1: Use Existing Partition or Partitioning Scheme

Windows 7 installation wizard will not modify existing partition which already been defined and allocated. The 100 MB BitLocker partiton will only be created when user creates new partition on a clean and empty HDD (no partitions), or delete all partitions and then create a new partition during setup. Thus, system with hard disk already partitioned, and users wish no change to existing partitioning but wish to clean install can just format the partition in Windows 7 setup wizard before installing.

Method 2: Partition the HDD Before Installing Windows 7

It’s “almost impossible” to stop or cancel the 100MB system reserved partition from been created in Windows 7 Setup (unless you uses hack 3 below). So for people you prefer to delete off all existing partitions, or want to install Windows 7 to an empty hard disk, it’s recommended to partition the hard disk before starting Windows 7 setup, through several ways.

One way is to boot up the computer with a Windows XP or Windows Vista installation CD or DVD, or any other bootable disc with disk partitioning utility, and then perform the re-partitioning. Quit the setup after finished partitioning, and start up the computer with Windows 7 DVD to install Windows 7.

For user with only Windows 7 DVD, follow these steps, as provided byUkonCornelias:

1. Once Windows 7 Setup is loaded, press Shirt + F10 keys at the first setup screen (which allows selection of language, keyboard and locale). A Command Prompt window will be opened.
2. Run Diskpart, the built-in disk partitioning tool of Windows 7 with the following command:
   diskpart
3. Type in the following command one by one, follow by Enter key to create a partition (text in brackets are comments only):
   list disk (to show the ID number of the hard disk to partition, normally is Disk 0)
   select disk 0 (change 0 to another number if applicable)
   clean
   create partition primary size=80000 (create a partition with 80 GB space; to use entire disk as one partition, omit the “size=value” parameter switch; use similar command to create more partition if needed or create in Windows 7 after installation)
   select partition 1
   active
   format fs=ntfs quick
   exit
4. Type exit at command prompt to close Command Prompt window.
5. Continue Windows 7 installation as usual. Remember to just highlight and select the partition just created when come to partition screen.

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Source
why are you trying to delete it if removing the disk is an option?
You should be able to boot win7 if you use the bcdboot command: 
http://technet.microsoft.com/en-us/library/dd744347(WS.10).aspx 
after you remove the disk.
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Try downloading WAIK for Windows 7 and cpature an image of your machine as it is when it works.
You will make a bootable winpe (or WAIK) cd with the tool imagex on it.

You boot to this cd and it will allow you capture your OS as one large file with a .wim extention.

Then you remove the drive and you are left with new drives available etc.

Then you boot again to the cd and "apply" the image to the remaining drives.

After it is applied run the following:
x:\windows\system32\bcdedit /set {default} device partition=c:
x:\windows\system32\bcdedit /set {default} osdevice partition=c:
x:\windows\system32\bcdedit /set {bootmgr} device partition=c: