I've been googling for a while and I still can't find a straight answer for this question.
I currently have a 500GB SATA drive with 2 partitions, C: has Vista Ultimate in it and most of my (Really Important) data is in D: -- I do not have an external drive with enough space to back up both partitions, only C: -- If I install Windows 7 on C:, will I also lose all the data in D: (Partition 2)?
I want to be 100% sure I won't end up with data loss on D: if I do a clean install on C:
Installing the OS on C: will not affect the data on D:, although any applications that were on D will have to be re-installed in the new OS for them to work properly. If D: is purely for data storage you shouldn't have that problem.
Installing to the C: partition will normally not effect the D: partition (in fact that is why people partition the drive in the first place !) that said there is always the off chance that something can happen since they are the same physical HDD (Very rare for it to happen but since they are on the same physical drive it is always possible that something goes wrong - so backing up vital info prior to any major change is always the best option !)
That said I have done this several times over the years and never had any problems.
be very careful because win7 requires? a small 100MB partition, and so may need to reformat the drive.
Can someone confirm if this will affect previously-made partitions and end up asking me for a reformat/repartitioning or if it's possible for Win7 to make this 100mb partition within C: and not affect D: at all.
In my experience, you'll get different results depending on whther or not you allow Win7 to create partitions or not. You should be absolutely fine if you are reusing an existing partition; the partition itself won't be altered aside from maybe being toggled to/from active. It's when Win7 is allowed to create a partition out of unallocated space that it creates a 100MB system partition (It tries for bootloader segregation if possible).
Since you express concern about preserving existing content, I suggest you find some way to back up the data you don't want to loose. The best solution is to start saving some money for a new HD. A new HD costs less than a legit copy of Win7.