I can assure you it can work just fine in Windows 7 - that's what I use day in and day out.
Chances are your display driver is falling down when tasked with doing the many Photoshop accelerations. As Curt said, check for the latest driver.
As a test you can deconfigure Photoshop's use of the GPU via settings in the Edit - Preferences - Performance dialog. Make sure you close and restart Photoshop after making any such change. If doing so improves your user experience then you'll want to put some effort into determining whether you can get a better display driver version for your system. What graphics interface (GPU) do you have in your system?
-Noel
