Mazen,

I run IE7 on Vista Ultimate on my computer and regular maintain a number of DNN sites without a problem.  This sounds like an issue with IE7 settings preventing something on the client side from being initialized.  I would make the following changes one at a time and test at each change.

First I would try deleting all temporary internet files... 

• From withing IE7, goto Tools > Options. 
• Under "Browsing History" click [Delete]
• In the "Delete Browsing History" window click [Delete all...]
• Then try again

If that doesn't work, perhaps security settings are interfering,  Try resetting your security settings...

• Go to the "Security" tab of the IE Options window.
• If the option "Enable Proptected Mode (required restarting Internet Explorer)" is unchecked, try restting the security settings by clicking the button [Reset all zones to default]. 
• You will have to restart IE (close all instances of IE that you have open then go back to your site.

If that doesn't work, try resetting all advanced settings...

• Go to the "Advanced " tab of the IE Options window.
• click the [Restore Advanced Settings] button.
• Restart IE7 and try again.
• If this didn'e work go back to the "Advanced " tab of the IE Options window.
• under "Reset Internet Explorer Settings", click the [Reset] button

If none of this works post back here and someone else may have another suggestion.

I hope this helps,

Chuck