Ignore this post, FT has found the answer above I believe!
Interesting.
I have installed Office 2007 on Windows 7 32 and 64 bit several times, and not seen this issue.
I did not use the 'Run as..' option to elevate user perms, this may install it in the admin context hence the error you saw http://support.microsoft.com/kb/898512 May assist you here (the .dat file may have another name with 2007)
I have left UAC on but with the following setting: