Hard disk partition creation problem

hello,
yesterday, i was running on a windows xp service pack 2 and i wanted to install windows 7 ultimate. So i formatted drive c and tried to install windows 7. Amidst installation, it opens a "drive manager" like thing which allows to create, delete, format, combine a partition and also where to install windows 7. I dont exactly know what did i do but i deleted two of my partitions (one 20 and other 10gb). Ideally, when i delete two or more drives they appear as a single "unallocated space". But yesterday they appeared as two distinct spaces. Then, i partitioned them and formatted them using ntfs file system. In front of one there was "primary", and in other "extended" was written. When I tried to install in the extended one, it failed and i deleted that drive. So i installed it in former one...but now, it is not able to create a partition in that unallocated space.

My hard disk is a 160gb seagate and i also ran some tests and zero resets on the hdd using seagate tools. The hdd passes all the things successfully but i m still having that problem. Somebody please help.
 
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