There might be an issue if only one of the partitions is available, as it might be doing a check for either no partitiona, partitions without PHTSYS/PHTDTA label or 2 partitions correctly labelled.
I'll check that and put a fix in for the next version. As sbingner says though, just delete the existing partitions and you should be good to go.
Start, Control Panel, Administrative Tools, Computer Management.
Select 'Disk Management'
Locate your DMS disk, (NOT DISK 0!) in the bottom right pane.
Right click on any/each of the rectangles next to your DMS disk and choose 'Delete Partition'
When you are done, close disk management and re-start the DMS tools.