Windows 7 Boot Configuration Data (BCD) is placed on the XP (primary) partition. It should be moved to Windows 7 partition.
I would proceed as follows (done in Windows 7):
1. Convert Windows 7 partition from logical to primary+active. Use EaseUS Partition Master (RightClick on partition and "Convert to primary". Then "Set Active".)
2. Download and install "Visual BCD Editor" from http://boyans.my3gb.com
. It has a "Dual-boot Repair" tool. Run it. Click on "Automatic Repair" and confirm.
This will create BCD on Windows 7 partition as well as write a Windows 7 boot record to the partition.
After rebooting check with Disk Management that Windows 7 partition is now "active+system+boot".
Now the XP partition can be deleted (formated).
You can delete the boot entry for XP using "Visual BCD Editor". RightClick on XP loader entry and "Delete selected object".Note:
After changing (shrinking, expanding, converting to logical or primary) partition properties the BCD data for that partition is no longer valid.