You're asking about two different subjects.
I assume, Windows XP and now Windows 7 are installed on C:\ drive.
If so, then D:\ partition, or drive is a recovery partition, which would be needed only, if you wanted to go back to XP.
If you're planning to stay with 7, you don't need D partition at all.
Now, regarding "windows.old", please read here: http://www.jimmah.com/vista/content.aspx?id=14