How can I use jQuery 1.7 without having issues in the admin pages?
I would look at Clive's advice on doing it manually here:

How do I update jQuery to the latest version I can download?

and add some more intelligence into the script to not do it on admin pages, eg:

if (arg(0)=='admin') {
  return;
}


You would also have to do that on node/#/add and node/#/edit pages etc so as to not disrupt anything "core" there, or, if you want, dive into drupal core and bring everything else up to 1.7 as well.

Depending on what version of Drupal you are running, this might also work:

function YOURTHEME_preprocess_page(&amp;$vars) {
  if (YOUR CONDITION HERE) {
    $scripts = drupal_add_js('PATH TO YOUR JQUERY FILE');
    unset($scripts['core']['PATH TO DRUPAL JQUERY FILE']);
    $variables['scripts'] = drupal_get_js('header', $scripts);
  }
}


where you could set "YOUR CONDITION HERE" to be whatever pages you want the new jquery on, eg, arg(0)!='admin' etc.