Deleting the D: partition would be bad because it is the partition you're booting the computer with. If you delete it, you won't be able to boot Vista.
If you'd like to continue, boot from the Vista DVD -> Repair my computer -> Next -> Command Prompt
First you'll need to find which partition is which by drive letter. You can do this with diskpart:
diskpart
list volume
exit
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Next you'll need to copy the boot files for Vista over to the Vista partition using the copy command. Replace A: with the drive letter for XP and B: with the drive letter for Vista:
copy /Y A:\bootmgr B:\bootmgr
copy /Y A:\boot\bcd B:\boot\bcd
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Last part is to set the the Vista partition as active:
Replace 0 with the correct number for the partition as listed:
list part
select part 0
active
exit
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Now reboot the computer and see if you can still boot Vista. If you can, delete XP's partition/re-format it for other purposes.
If you can't or can't delete the partition from disk management now, boot from the Vista DVD again.
Go back to the command prompt on the Vista DVD. To delete the XP partition replace 0 with the right number for partition again:
diskpart
select disk 0
list part
select part 0
delete
exit
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If you cant/couldn't boot Vista up to this point exit command prompt and select startup repair if you select your install from the OSes to repair.