From what you are saying Wisdomwarrior23, I think you are erroneously marking the second partition "D" as "Active", not knowing what it will do to your system.
As I see it when you install NT, reboot and make changes to Disk Administrator to create second partition whether FAT or NTFS you just seem to mark the new partition as "Active" that's why you get the message "kernel error missing kernel, please insert system disk and restart" on restarting.
Normally, you select the primary partition that contains the startup files for the operating system as "Active Partition".
If you are using "C" partition as you system and boot partition, "C" should be "Active", which is the default.
Technically speaking, the BIOS looks at the partition table found at 0 Track, finds the Active Partition and loads the OS from there. If it's NT, the NTLDR takes control from there onwards. It calls Boot.ini which further points towards the OS files you pick. Then the NTDETECT.COM comes into action and checks the hardware. From here, NTOSKRNL takes command from NTLDR and loads what you call Windows NT.
Now that's the little mistake you are making; marking "D" as "Active" when there's practically nothing on it.
If that's the case, I think there's a remedy too. If your primary partition is FAT, and you erroneously set "D" as active, boot the system with a DOS disk, run "FDISK" and set "C" as "Active" partition. Reboot the system and you should see your NT blue screen (ntoskrnl) again.
Go ahead if that's the mistake you are making and tell me about it as I have never done it!
Hope this helps.
Mubashir