Hi SmokingMan,
See this thread
Paint shop pro 7.
As suggested there, running PSP7 in XP mode, which, judging from your PC specs, seems possible for you, may be the way to go.
Windows 7 Compatibility Center don't specifically list PSP7 as having a compatibility problem, however, I do think you are going to have some trouble seeing as PSP8 is still having problems and being worked on.
Hope this helps.
.