Help with installation?

When i am trying to install windows 7 i am encountering a problem. Once i reach the part when i must choose a download location the only option they give me is my external usb hard drive, which i do not want to install windows 7 on. When i search for my c drive (clicking browse) i get the following message: No device drivers were found. Make sure that the installation media contains the correct drivers, and then click OK. Does this mean my c drive does not have a driver? I mean why wouldn't it recognize my c drive, my current windows xp is installed on it as i type..? Is there a way to make my computer recognize my freaking hard drive so that i can install windows 7.