Remote Desktop is disabled by default in Windows 7 or Vista if you want to remote into the machine it will be necessary to turn it on.
And as you are connecting from an older version of Windows which you did not tell us the version of so you will need to enable compatiability for the older versions of RDP. Even if you installed the latest, greatest iteration of RDP you are still on another OS and need to have this checked.
You also you did not say what version of Windows 7 you are using but it is only included in the Professional, Business, or Ultimate versions of Windows. Home editions do not have remote desktop.
<b> I repeat HOME VERSIONS of 7 DO NOT HAVE REMOTE DESKTOP and it will not work.</b>
Here are the steps necessary to check if the remote desktop is enabled:
Right click my computer
Click on Remote Settings on the Left
Make sure the check box is checked
Make sure your check box is on the Allow connections from computers running any version of Remote Desktop</ol>
Save restart and try again