Problem connecting Nexus 7 as mass storage device on Windows 7
Although I'm surprised it didn't work in Windows 7 out of the box (it worked on my PC) there is a way to fix it.

Please open C:\Windows\inf\wpdmtp.inf in Notepad and add following

; Nexus 7
%GenericMTP.DeviceDesc%=MTP, USB\MS_COMP_MTP
%GenericMTP.DeviceDesc%=MTP, USB\VID_18D1&amp;PID_4E42&amp;MI_00


In two places - at the end of sections [Generic.NTx86] and [Generic.NTamd64]

This method will also work on Windows 7 after installing Windows Media Player 11.