The "bug" is a problem with the motherboard not recognizing the SSE capability of the processor (athlon 2600). So programs that need SSE like Company of heroes and Recent source games for example simply won't work because of lack of SSE. My question simply was if Windows 7 required hardware that could process SSE instructions.
If you're interested in looking up the bug, it's on the ECS K7S5A motherboard. An app was released to try and fix the problem, but it's highly unstable.