Hi, Bob
Version 4.7.7 does work on Windows 7. The message you're seeing is fairly specific, and usually indicates that there were some permissions issues during install.
Does the folder listed in the error message exist, and does it contain 11 files? We've most often seen this when Windows is unable or unwilling to provide an appropriate path for the Common Appdata folder, which defaults to C:\ProgramData on most Vista and Win7 machines. If that happens, our installer ends up putting a "The Neat Company" folder at the root of C:.
If that folder exists there, copy it to C:\ProgramData. Note that this is distinct from C:\Program Files, and may require that you turn on display of hidden files and folders.
We no longer use the SQL Server architecture, so the presence or absence of another SQL instance won't matter to us.
Mike Landis
The Neat Company