Not a W7 issue, using it right now (64bit) and with nvidia 8800gt (cuda) and no khash drops when in background.
I thought he meant that the ATI Streaming SDK v 2.1 didn't take on his Windows 7 box. I had the same problem with 2.1 and 2.2, which is why I'm running 2.3.
That's was precisely it. I'm stuck with the 2.3 SDK, though I've tried for days to downgrade... I'm not in the mood to slick my OS...