Hi there, I also have the same problem with all my flash drives. Windows 7 is able to detect a new hardware has been plugged in, however it just DO NOT have the driver to install, not even after searched in Windows Update. Having said that, it is not shown any where in Disk Management as a Drive or Partition. I'm stunt as flash drive drivers are suppose to be the most common thing in any OS where even the manufacturers need not publish the drivers for download.
I wouldn't blame Windows 7 to be the culprit because apparently not all users have the same problem. I have friends who can use their flash drive with no problems same like Copyright above!
Warcat, did you try to format and re-install the Win 7? Or searching the drivers in Win Vista CD? I may want to try these later....