You didn't miss anything; that's the way a WHS restore works. I presume that the designers figured that people would usually be restoring to the same disk, so that repartitioning would not be necessary, and that they'd get help if they needed to restore to a new disk.
I too found it odd that you need to partition and format before restoration - that's a strange concept to me. Most other imaging software that I've used can restore to blank, unformatted disks - they just restore raw sectors. But that's OK - it's an easy adjustment to make.
I realize that many users don't create bunches of partitions like the olden days. However, Win7 insists on creating the 100 MB boot partition. I'd say this is an area for WHS improvement. If I hadn't had another Win7 drive in the system, I (1) wouldn't have known to create 2 partitions for restore and (2) wouldn't have known that partition 1 needed to be 100 MB.
