You can use a free partition manager to remove that space (if it is not the recovery partition created by Windows 7...).
Then you can resize the other one.
I suggest Partition Wizard or Easeus Master to do this job.
About the infection, I suggest:
1. Clean your temporary files.
2. Schedule a boot time scanning with avast with archive scanning turned on. If avast does not detect it, you can try
DrWeb CureIT! instead.
3. Use
MBAM (or
SUPERantispyware or even
Spyware Terminator) to scan for spywares and trojans. If any infection is detected, it is better and safer to send the infected file(s) to quarantine (Chest), rather than simply deleting them.
4. Test your machine with
anti-rootkit applications. I suggest
avast! antirootkit or
Trend Micro RootkitBuster.
5. Make a
HijackThis log to post here or
this analysis site. Or even submit the
RunScanner log to to on-line analysis.
6. Clean your Hosts file (replacing it) with
HostsMan tool.
7. Disable System Restore and then reenable it again.
8. Immunize your system with
SpywareBlaster.
9. Check if you have insecure applications with
Secunia Software Inspector.