You're on the right track, and Boogieman_WD has pointed out some important things. But you need to fill in details.
The basic process involves this sequence, but details will follow:
Copy everything from E: to D: (The "everything" might be an issue)
Disconnect the D: drive unit so you can't make a mistake and cause a problem
Back up your C: drive
Delete the Partition called your E: drive
Use an appropriate tool to Expand the C: drive to include all the space available on that HDD unit
Reconnect the D: drive unit.
Copy all your old stuff that was on E back to C: or D:, depending on where you want it.
Background: On any HDD unit you must create at least one Partition and Format it. That space is called one "drive" by Windows, and it has its own letter name. It is entirely possible to create more than one Partition on an HDD, and each of them will be called a "drive" with its own letter name. That's what you have. Two Partitions were Created and Formatted on that one HDD unit.
Now come some of the tricky details.
(A) The late-stage process for Expanding the C: "drive" to include all the space available on that HDD unit depends on what OS you have installed. Win 7 and 8, I believe, will do this using its built-in tool called Disk Management. But earlier versions of Windows would NOT do that for any "drive" that included your OS, and you have your OS on the C: "drive". So, if you have an earlier Windows, you'll need third-party software for this step, something like Partition Wizard - there are many such utilities available. NOTE that such processes are risky in this way: they don't fail often but if they do you could lose EVERYTHING on the HDD unit you're working on. So it is ALWAYS advised to do a backup of everything on that HDD before doing the Expand process. That is why you should copy everything from the E: drive AND back up your C: drive.
(B) In your short-of space situation, maybe you had to Install some application software on the E: drive. Did you? The problem is this: Installing an app means that Windows places info about it in Windows' Registry files, including where the app is located. But in the end, the stuff currently on E: will not be there - there will be no E:! There is no easy way to change the data in the Registry files. IF you have any such software Installed on the E: drive (NOT any of its associated data files - only the actual software) your best plan is to Uninstall it at the start. Then you will re-Install it on the larger C: drive at the end, and this will revise the Registry entries cleanly so they work.
(C) Depending on what things you have placed on your E: drive, copying EVERYTHING from it to D: may not be simple. For example, if there are any applications installed there, they could include hidden files or directories that will not be found and copied by a simple COPY operation. One way to get around this for the FIRST part - that is, making copies to the D: drive - might be to use a cloning utility instead of just copying. That WILL copy everything. However, the last operation of copying back to the new larger C: drive can't be done that way. So at that point you MAY need to do some extra work if some files seem to be hidden.
(D) If you choose to use the Cloning option you can also use it to back up your C: drive. BUT a cloning operation needs empty HDD space to place the clone copies on, and it will use that space to create one or more new Partitions for those clones. You could do this in two ways. One is to get (buy or borrow) a spare HDD with at least 320 GB of empty space to use, and when you're finished it can be wiped clean and not needed. The other would be to create the empty space you need on your 700 GB D: drive. Right now it is one "drive" (Partition) of 700 GB. But IF it has over 320 GB of Free Space, you could do this. Use Disk Management to Shrink the existing Partition by at least 320 to 350 GB. This will create a chunk of Unallocated Space on that HDD unit. You can use that space for the clone copies. When you're completely finished the process, you can Delete the two Partitions that used to hold the clones, then use Disk Management to Expand the (temporarily smaller) D: drive back up to its full size.
So here's the total sequence, assuming you will use cloning to empty space you create on your D: drive.
1. Use Disk Management to Shrink the Partition on your D: drive and create at least 320 to 350 GB of Unallocated Space on that HDD unit. If you're not familiar with Disk Management, start by clicking on "Start", then RIGHT-click My Computer and choose Manage from the mini-menu. In Computer Management, choose Disk Management from the menu tree. It shows two panes on the right, both of which SCROLL so you can see everything. The UPPER RIGHT pane shows you all the "drives" Windows recognizes. You need the LOWER RIGHT pane that shows hardware storage units. There each storage device is represented by one horizontal box with a bit of label info at the left end. Inside each such box is one or more sub-blocks, each representing one Partition on that device. Each will have its own info details as a label. In your case, one HDD (320 GB) will contain two Partitions for the C: and E: "drives", and the other (700 GB) will have one Partition for the D: "drive" that uses up all the space on that device. If you RIGHT-click on a Partition, you'll get a menu of actions you can take, like Shrink or Delete or Expand, etc.
2. Make SURE you have the Install disks for any software you have installed on your E: drive. It there is NONE of that, skip this step. Now Uninistall any such Software on the E: drive, but do not delete any of the data files associated with them. (This step clears out of the Registry any references to that software.)
3. Get a cloning utility and install it on your C: drive. (This means you do need a bit of Free Space available on the C: drive!) There are several third-party packages around, some free and some not. But one place to get a cloning system for free is from HDD manufacturers' websites. Some have such utilities for free download, but with a limit: they will only make a clone TO a HDD they made. So if your 700 GB unit was made by Seagate, get their Disk Wizard. If it was made by WD, get their Acronis True Image WD Edition. READ the manual document that comes with the utility package - often they do MUCH more than just cloning, and you will need to know how to use their menu system to customize the steps ahead.
4. Now you need to make the clone copies of BOTH the C: and E: drives. Most cloners can do this in one step, but you will need to make custom adjustments.
(a) Start up the cloning software and get to the section that does cloning. The first step is to specify the Source and Destination HDD units. Be very careful here, because the Destination space will be wiped out, and you don't want that done in the wrong place! Specify that the SOURCE unit is the 320 GB HDD, and the DESTINATION unit is the 700 GB HDD. BUT be careful to ensure that it is NOT using ALL of the 700 GB unit. It should be using ONLY the empty Unallocated Space you created earlier.
(b) The software will present you with proposed settings for the operation. It will do this assuming a plan called "Proportional Partitions". It will propose to split up the available Unallocated Space into two Partitions whose sizes are in proportion to those of the original Partitions on the 320 GB HDD unit. That is not necessarily right, and you should change that. The smaller Partition will hold the clone of your C: drive, and that only needs to be the size of your current C: drive, with MAYBE a little spare space. It will need to be a BOOTABLE Partition, which is probably a default setting. The larger Partition will hold the clone of your E: drive, and it can be any size large enough to hold all the stuff that E: has. It does NOT need to be the same size as E, because the clone does NOT need to replicate all of the Free Space on E:. This Partition does NOT need to be bootable, since it contains no OS. Other settings, like the type of File System (it should be NTFS) for each new Partition probably are correct.
(c) When you have all the settings right, let the cloning process proceed. It will take a long time to do the job, so be patient. When it is finished, back out of the utility and reboot your computer.
(d) Check what's been done. If you look in My Computer now, there should be all you old "drives" plus two new ones (probably called G: and H:, or something like that). One will look exactly like C:, and one will look exactly like E:. Those are your clone copies.
5. Shut down. Disconnect the 700 GB HDD unit so nothing can affect it. If has your original D: drive plus the two backup clones of C: and E:
6. Turn on and the machine will boot to show only the C: and D: drives. What! Why D:? Because Windows probably will assign the letter D: to the only other "drive" in your system now - there is no second HDD unit attached. Examine the D: drive and satisfy yourself that it is the old E: drive. Now use Disk Management to go to the 320 GB unit. RIGHT-click on the larger Partition that is D: and Delete that Partition. It should become Unallocated Space. Back out and reboot to ensure Windows has this all correct. Now go back into Disk Management and RIGHT-click on the C: "drive" Partition and choose to Expand it to take up all the available space. When that's done, back out and reboot again. Look in My Computer to verify that now your C: drive is a big one, about 295 GB with lots of Free Space.
7. Shut down, reconnect the 700 GB HDD unit and boot up. My Computer should now show a total of 4 "drives". Of these, C: will be the newly-larger boot drive, D; (probably) will be the old D: drive, and the other two will contain the clones of the old C: and E: drives. If you got this far with no trouble, you won't need the C: drive clone - that was just in case something went wrong earlier. But leave it alone for now.
8. IF you had to Uninstall software that had been on the old E: drive, now is the time to Install it again, this time on the C: drive. Reboot when you're done to ensure Windows Registry is updated and clean.
9. Now you can COPY all your old data files from the clone of the old E: drive back to C:, or maybe to D: if that's where you want it. In your applications software, you may have set up where each app stored it files - probably on E:. You may also have had some Windows settings using the E: drive for things like My Pictures or whatever. If you did, re-set these so they use the correct new drives.
10. Reboot and start using your machine. For the time being, leave things as they are. You MIGHT stumble across something missing among the files on your C: drive that should have been copied back from the old E: clone, but did not get copied. If you do, you still have that stuff on the clone Partition.
11. Once you're confident you don't need the clone copy of the old E: drive, do a final clean-up.
(a) Use Disk Management to go to the 700 GB HDD and, for each of the two clone copy Partitions, RIGHT-click on it and Delete it. Now you have one Partition (the D: drive) and a bunch of Unallocated Space.
(b) RIGHT-click on the D: drive and Expand it to take up all the available space on that HDD unit.
(c) Back out and reboot. You should be at your final configuration: one C: drive of about 295 GB, and one D: drive of about 700 GB.
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