I installed the gridseed on my windows 7 machine via USB and I see the gridseed installed as COM3.
...
What did I do wrong?
On Windows you'll need to install a make-shift CDC driver for the GridSeed ASICs. This is basically an unsigned, hand-crafted INF file that allows Windows to recognize the device properly.
Note that, depending on the version of Windows, you'll need to Google steps that let you install unsigned drivers.
https://www.dropbox.com/s/w06b7nj1f07lv29/Windows_ASIC_CDC_Drivers.zip