Because PSE 7 is not compatible with Win 7. Ask in the PSe forums. Someoen might have an idea, but generalyl you should consider upgrading to PSE 11.
Moving this discussion to the Photoshop Elements forum.
If you are using the trial version of PSE7, you should upgrade to PSE11. Here is the link to download trial version:
Otherwise if you want to continue using PSE7, please try couple of probable solutions as mentioned below:
1. Close Elements.
2. Launch the Photoshop Elements Welcome Screen and hold down ctrl + alt + shift as you click Editor.
3. Continue to hold the keys until you see a message box asking if you want to delete Photoshop Elements settings file; click Yes. Elements will open with default preferences.
Solution 2: In case any network printer is attached try to launch without network or printer uninstall or make different printer as default.
Solution 3: Try launching with anti-virus off or removing PSE from conflicting list.
On the drive on which you have installed PSE,on my machine it is on C:
Go to C:\Program Files\Adobe\Photoshop Elements 7\Locales\<locale>\Plug-Ins\Import-Exportand you will find twain plug-in. Remove that plug-in from that location and copy it somewhere else.
Now launch PSE and check if it works.