Win 7 32bit is okay; but everything needs to be in compatibility mode. Likewise if you're installing the LWAMI mods, they too need to be run in compatibility mode. Without it, they'll appear to work, but they won't actually have any effect.
Edit: I should add, I had the symptoms above on an XP box; it was caused by a dual core AMD processor; applying AMD's driver helped. I'm not sure this is available for Vista/7, but it's worth exploring.
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