I'll answer your questions in reverse
Is this detrimental to the running of the computer? = NO
What did I do wrong? = NO IDEA
If you have more than one drive, you have possibly installed OS on another drive
Did you delete partition and create a new drive from RAW format or the originial boot.ini file is still going to be present.
How do I get rid of it?
There's a hidden file in the root of your boot drive that not many people know about, called "boot.ini". It controls what happens at boot time. In the past the thing to do was to edit this file manually, but that's no longer necessary.
Right click on My Computer, and select Properties. Now click on the Advanced tab. In a section labeled Startup and Recovery click on the button labeled Settings. You should now be looking at a dialog: refer attached
Click on Edit to edit the startup options file (aka boot.ini) manually. That should open Notepad with something similar to the following from my machine:
[boot loader]
timeout=5
default=multi(0)disk(0)rdisk(0)partition(2)\WINDOWS
[operating systems]
multi(0)disk(0)rdisk(0)partition(2)\WINDOWS="Microsoft Windows XP Professional" /fastdetect /NoExecute=OptOut
C:\CMDCONS\BOOTSECT.DAT="Microsoft Windows Recovery Console" /cmdcons
In this example, you can see that I have two options to choose from when I boot: Windows XP, and the Recovery Console. I'm guessing you have an additional line for theOS Setup that you had trouble with it. You can simply delete that line.
And if you're tired of having the computer wait 30 seconds for you to choose an operating system, you can also change the timeout value,
Save that file, and when you next reboot you should no longer have that additional option.