Joan,

As 8 is an upgrade it is probably looking to upgrade 7, so can't find that on your D drive hence no option.

I would try putting 7 on D then that should work ok to upgrade we hope.

A second copy of 7 is a good idea in my opinion so as to do online banking etc so all will not be lost.

A good easy enough to learn tool to download so as to point windows to a particular windows installation on a different partition is EasyBCD.

Musiclover

P.S I have now checked with Microsoft and windows 8 (upgrade version) has to see another OS such as windows 7 on the partition that you want windows 8 on.

Probably a few ways to do this, either do a fresh install of windows 7 first or a more convenient way would be to install your existing image backup of 7 on that partition, boot into your old existing windows 7 and use EasyBCD to point windows to the new windows 7 in the bootloader, sounds more compliacted that it is actually as EasyBCD is fairly straight forward in this respect.