If you remove the 300mb hidden partition your system does not start anymore.
Solution 1:
Open command prompt
bcdboot c:\windows /s c:
Open diskmgmt.msc & Mark Partion as Active.
Reboot the VM.
Delete the BDEdrive partitie.
Extend the C-Disk with the empty space
Solution 2:
Boot with Windows 7 or WIndows 2008 R2 installation DVD, select repair and open a command prompt.
Type diskpart
Type select disk 0
Type list partition
then note the partition number where you installed windows 7.
Type select partition X (X is the partition number where Windows is installed)
type active
type exit
type bcdboot.exe c:\windows (if C is your windows partition)