I started using Windows 7 a few days ago and needed the Python interpreter. I also needed the WIN32 extensions for Python.
The Python installation worked just fine, I downloaded Python 2.6.2 and it installed with the expected Microsoft UAC prompt confirming that I truly intended to install.
The WIN32 installation prompted for UAC as well, but then failed with an obscure error message. However, I was able to successfully install if I opened a command processor window with "Run as Administrator", and then ran the pywin32 installer from there. With that "magic", the installer succeeded and had the happy message "The pywin32 extensions were successfully installed".