You probably have it misconfigured. I've used it on XP, Vista and Win7 on multiple PCs. Be sure your keyboard whitelist/blacklist option is set correctly. I had an old guide on this somewhere; I'll see if I can find it tonight.

If I recall correctly, I had my set up for Whitelist Only and added my combat keys (0-9, qwert, zxcvb, arrow keys) only. My mother used it successfully on Win7 up until I got her an ISBoxer sub for her Birthday last year.