I haven't heard about the Drive Options; although, in other upgrades, Windows didn't care if there was Unallocated space, as long as there was sufficient space on the main (C:) drive for the installation.
I'm about to run the upgrade on my system today, so I'll see if I encounter any similar problems; and, if not, let you know what steps I used. In reading the Microsoft upgrade tutorial page (http://windows.microsoft.com/en-us/windows-8/upgrade-from-windows-7-tutorial), it looks like it should be straight-forward. NOTE - This is different than running the Win8.1 Recovery DVD provided with the HP EliteDesk Tower, and I recommend following the HP steps. I am going to run the Microsoft Upgrade Assistant, just to see what it reports.
- Alan.