abeeftech, I'm just thinking of something.
You say that Windows 7 says you have "two processors". In other words, it says that you have two physical processors thus 4 cores.
Also, just a test.
Run a benchmark on Vista. Note the results and run the same on 7 and compare. If the results are somewhat near from each other, then, Windows 7 and Windows Vista both sees that you have two physical dual core CPUs and that only the way they name them change.
Also, anothe test :
1. In the Start Orb menu, in the search field, search MSCONFIG and open it.
2. In the START tab, click on "Advanced Options"
3. Check the box "Number of processors"and check the dropdown box. What's the higest number that shows up?