I have been trying to unpartition my hard drive, but every time I click on the minus button and try to delete the 2 virtual drives, it processes it then fails and says Partition failed with error: Filesystem verify or repair failed. I have tried verifying and repairing the disks, but this hasn't helped. Why is it doing this? Here is a screenshot of the error: http://arunaurl.com/2fm4

You need to back up mac with time machine. Than put in the install disk, remove ALL partitions, or just tell it 1 partition, and erase it all, then reinstall from the time machine backup is the only known way to fix that error.