Setting up on your boot disk or another HDD? If you're placing it on your boot drive, open Disk Management and reduce the partition size: This will generate unused space on your main hard disk. When installing Windows 2000, during setup choose the "Disk 0 unallocated space" option for installation. Windows will then install into that newly made partition. Now... developing a bootloader presents another challenge. Windows 7 should detect the 2000 installation, but since you've already installed Windows 7 first, I'm not entirely sure. You might try searching "System environment variables" in the Start menu—it will open a window where you can press the "Startup and recovery" button. After installing Windows 2K, it should appear there. Remember, you can only install Windows 2000 on SATA or IDE drives (for consumer systems), not NVMe. Given you're using Windows 7, it's unlikely your hardware is outdated enough to cause problems, though exact compatibility depends on your specs. You may need to adjust your BIOS settings—change the SATA controller mode to "IDE" or "Legacy." This will slow down your drive because speeds will be capped, but it won't affect Windows 7 once you're done.
Consider keeping the existing file system unchanged (no modifications)
It's beneficial to allow Windows to handle the partition formatting.
It's not a virus. It appears to be located in the System32 DRIVERS folder.