I had another issue with win7 yesterday. I wanted to install nHancer, but i needed to update my GFX drivers to use it. After the update to the most recent forceware drivers, SH3 would not start. I kept geting either, unable to initialise 3D engine, or a plain SH3 has stopped working. I tried with and without the d3d9.dll screen res fix but no joy. eventually I rolled back to the stock driver that ships with win7 and it worked again, only now I get every now and then a kind of false start, where it starts, but only appears as a process in task manager...
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