ubuntu live cd 12.4 does not see windows 7 already installed

I suggest you chkdsk your Windows partition. I also suggest you resize the NTFS in WIndows then install Ubuntu to the free space.

Is it the system partition or the C partition that I have to shrink and is it the volume.

Is this what I am suppose to do

Shrinking a simple or spanned volume
Using the Windows interface

Using a command line

 To shrink a simple or spanned volume using the Windows interface

In Disk Management, right-click the simple or spanned volume you want to shrink.

Click Shrink Volume….

Follow the instructions on your screen.

Additional considerations
When you shrink a partition, unmovable files (for example, the page file or the shadow copy storage area) are not automatically relocated and you cannot decrease the allocated space beyond the point where the unmovable files are located. If you need to shrink the partition further, move the page file to another disk, delete the stored shadow copies, shrink the volume, and then move the page file back to the disk.

If the number of bad clusters detected by dynamic bad-cluster remapping is too great, you cannot shrink the partition. If this occurs, you should consider moving the data and replacing the disk.

Do not use a block-level copy to transfer the data. This will also copy the bad sector table and the new disk will treat the same sectors as bad even though they are normal.

You can shrink simple and spanned dynamic disks, but not others.

I forgot to say thank you for the information. and please help me with my previous question about how to shrink the volume and which volume c or system to shrink.

I did the above and ran the live cd Ubuntu 12.4 to install it ( the space created from this is unallocated). Anyway when I try to install ubuntu 12.4 on my new HP Pavilion 64k desktop with windows 7 on it after doing this, I received the same error.
 I was going to undo what I did but I see that I lose 1g when I do that so now what do I do . it says I can do a new simple volume and maybe then the space will no longer be unallocated. I am just going to wait for help.

I think I have a bad cd (ubuntu 12.4) cause from my research I am not suppose to get a screen saying that (The computer has no detected operating system) I think this is a bad cd and I hope I did not mess up my computer. Please help.

I am on the ubuntu forum and I am getting some help but the problem still exists.

When I doing something with partitions i use Ubuntu LiveCD because windws locks his partitions. On Ubuntu LiveCD there is GParted-program for partitioning. When you bootup livecd resize existing and create new partitions( this manual should help:
http://gparted.sourceforge.net/display-doc.php?name=help-manual ).
1.Make empty partition ( linux needs ext2/ext3/ext4 partition to boot! ),ew 2nd partition for swap
2.Run Installer
3.When installer prompts select "Other solution","Advanced Partitioning" or what do you have.
4.Select partitions that you created
5.Install...

WARN: If cd doesn't recognize win7,after installation you must manualy configure GRUB for dual-booting