Microsoft Picture It is currently not compatible with Windows 7 or any other newer versions of Windows. It is compatible with Microsoft XP and other older versions. The compatibility can be confirmed by visiting Microsoft's Compatibility Center and selecting the OS for the desired product.
Microsoft has stopped use of Microsoft Picture It on latest versions of Windows. As a replacement for this tool, the available option is to download the Windows Live Essentials Photo Gallery. This tool provides a similar functionality; however, most users do not find it as useful as Microsoft Picture It because of limits in some areas of photo editing.