Sorry to butt in, but KotOR 1 and 2 are really problematic on Windows 7. I've got them both as well and they simply refuse to work.
KotOR has been infuriating me since I got my new computer, I got it to install when I first put the disc in but it was crashing non-stop so naturally I uninstalled it. After looking up solutions on various help forums I tried to re-install, but every time I try to, it comes up with "Are you sure you want to uninstall?". I went into "add and remove programs" (Where it is still present but taking up no memory or space whatsoever) with no luck, then went into registry editor to delete the files left on my computer manually. The funny thing is, once I've deleted the files in the registry editor (Bioware Corp/Lucasarts etc) , they come back about 10 minutes later. Also, during those 10 minutes the "Are you sure you want to uninstall?" prompt still comes up.
KotOR 2 is another thing entirely, I try to install it, disc 1 works perfectly but as soon as I put in disc 2, it stops and after a few minutes gives me an error message with "Cyclic Redundancy Check"... it may be a faulty disk? There's no scratches or anything on it.
I passed the Hardware Scan from the main menu when I had installed KotOR so that's not the problem (I have a relatively new computer that can play Oblivion on the highest settings). I've also checked for the latest graphics card drivers and they're downloaded so that can't be it either.
It's really starting to annoy me now. They're my favourite games.