1) Thats the "Program Compatibility Assistant" (PCA) at work. Its a new feature in Windows 7 that is meant to detect known compatibility issues in older programs. When you try to run an older program, it notifies you if there is a problem and offers to fix it for you the next time you run the program. If the compatibility issue is serious, the PCA may warn you or block the program from running.
If you think you know better or dont want PCA to nag you, you can disable it from Windows Services. Click the Start Menu button and type services.msc
at the Search Programs and Files bar. Scroll down and look for Program Compatibility Assistant Service, right click on it and select Stop.
The PCA warning can also be disabled in the registry by adding an Appcompat flag in the registry. See this MS support page. How to disable program fixes and Program Compatibility Assistant warnings in Windows Vista
2) Having said all of the above, would suggest you leave it alone. I use some older apps and find PCA quite handy. Also for routine software use, it doesnt really bug too much.