Lynda,
It's the same reason it doesn't work under Vista. Look at
http://my.advisor.com/doc/18897>What needs to happen for a launcher to run under Windows 7? Specifically, how do you grant the process the necessary authority to copy the update to the app directory and then execute it? I suspect the info is here somewhere but multiple searches have failed to find it.
Craig Berntson
MCSD, Microsoft .Net MVP, Grape City Community Influencer