Hello,
i have installed windows xp on c drive and it is showing boot status while other partition drive e shows system partition,i want to make that system partition as healthy so i can install windows 7 on c drive by overwriting it
Formatting the partition will mark it as Healthy. If you're getting rid of XP, let Windows 7 do it. Otherwise you want them both merged ? Re-partition on install and delete E: and any other logical partition. Partition as C: for the entire size and now you have only one.