I just tested, took three attempts, but it did work and the folder popped up on my W7 pc.
I had to go into settings>>applications>>development then toggle usb debugging, the USB mass storage screen then appeared, and it took 3 attempts, but then it did connect.
Holy crap--I wish I'd seen this 3 hours ago.... It took me two attempts, but toggling the debugging mode eventually allowed the phone to connect to Windows 7... :laugh: