you should contact the manufacturer because they have produced a version 4 which is compatible with Windows 7 see the link below. The company was saying they were working on a driver to fix the compatibility issue with version 3 but they obviously have one.
I am still not sure if they have a fix for Windows 7. I know they have brought out a version 4 which does work with Win7 but here is a link to the upgrade drivers they do have
What I understand is that your photo explosion deluxe is a windows xp software. Since it is not working readily out of the box in windows 7 then what you could do is install windows xp mode for windows 7. Windows xp mode allows xp software to be installed and windows 7. What you need to do is just download windows xp mode and install it. After which you could then install that software on there. Just make sure to uninstall your current installation of photo explosion deluxe before you do this.
Here is the link to the download for windows xp mode:
And Here is the link to some of their videos on how to use xp mode so that you could understand further how to set it up:
If you have any more questions or concerns please feel free to come by again here at fixya.com
You have a great day.
You will need to upgrade to version 4.0 to be compatible with Windows 7. http://www.novadevelopment.com/software/photo-explosion-deluxe-129012
go to the manufacturers website and find the drivers there
The website has an update to fix it