In XP it is done like this (I hope it's not too different in Windows 7):
Right-click on My Computer and choose "Manage". On the left side you will find Disk Management, click on it. On the right side, you will see the layout of your disk with drives C and D. You can format drive D.
Be careful with the disk manager and with formatting in general. Any mistake can cost you with loss of data. Have backups!