In the Volume label: textbox, enter whatever name you'd like to give to the drive. If the drive had a previous name and that makes sense for you, by all means keep it. Windows 7 will suggest the volume label of New Volume to a previously unformatted drive but feel free to change it.
In my example, I previously used this hard drive to store music so I had named the drive Music but my post-formatting plan for this hard drive is to store videos so I'm changing the volume label to Video.
Note: In case you're wondering, no, the drive letter is not assigned during the format. Drive letters are assigned during the Windows 7 partitioning process but can easily be changed after the format is complete. See How To Change Drive Letters in Windows 7 after the format process is done if you'd like to do that.