The same suggestions as recommended by Marty are valid for Windows 7. You can use WinKey-R > systempropertiesadvanced.exe > "System protection" tab. Click on missing drive, then [configure] and "Turn off system protection". Use the same path to enable system restore or file restore on drives.
This error can be caused by cloning the OS to a new hard drive, for example if a drive is failing or replaced by a larger capacity drive. On Windows Vista, open Control Panel\System and Maintenance\System. Under the Tasks pane, open "System Protection". Under "Automatic Restore Points" there should be a drive labeled as missing, such as "Drive C: (Missing)". Remove the check mark next to this item. Add a check mark to the drives that are present so automatic restore points will be created (by default 30 minutes after system startup, and every day at midnight). This problem could be a sign that the drive was improperly cloned, and might need to be individualized again using Microsoft's SysPrep tool.