I kind of had the error problem. Make sure you delete the file to make it unallocated HDD, then partition it first. and then format it.
So far this is what I have done.
I have format the HDD to NTFS
Downloaded Win7 iso
I'm trying to install windows 7 on my internal HDD. I have connected it as an external HDD to my other laptop. If it works I'll post a more precies way of how I did it.