Since it's a laptop, most likely there is only one physical drive. You see both C and D because your machine has a partitioned hard drive. Partitions basically trick windows into believing there are two hard drives. This can be useful for some people who want to split up there storage space. C is typically the main drive where windows is installed, but you can use D for any kind of storage just like you would C.
Since you stated your D drive is 99% empty, I doubt this is true in your case. However, I've noticed more and more manufacturer's are partitioning the hard drive into a C and D, and then instead of including System Restore CD's with your computer, they're storing all the restore files on the D drive.
I personally have 560GB of hard drive space (one 160GB and one 400GB drive). Instead of having two HUGE drives, I partitioned the 160GB drive into four 40GB drives and 400GB into four 100GB drives. This is just a way to organize your data for storage, security, performance or whatever you like. I have one drive for my digital pictures, one for MP3's, one for programs, etc... Then, I created a Windows script to run every day at 5am that will copy any new digital pictures on my F drive over to my H drive (which is solely used for backup). Let partitioning be your friend.