He's referring to the 14mb of unallocated drive space seen on the Windows drive there. The new drive is all set like Cromewell pointed out.
Since that is seen on the host drive and not the second drive you can take advantage of Vista's new capabity of resizing partitions. When booting from the installation disk you simply go into the repair tools section instead of choosing the "install now" option. Once there simply look for the drive tools since now you can do more then create and remove partitions but also format, reformat, and resize any.
The "1" on the 14mb was barely visible in your screen shot and only a small amount of actual space. That was from the XP installer since you replaced XP with Vista. Once in the drive tools section you simply choose the resize option to expand that to fill the 14mb gap seen there. It won't effect anything else being that small of a change to the Windows primary there. One reason I always used GParted is that it eliminates these minor annoyances caused by the XP installer. Vista sees that corrected.