I also get the same issue with the Creative Xi-Fi Xtreme Audio PCI soundcard and its 0079 drivers. I haven't yet tried the 0077 drivers, which didn't even work properly in vista, but who knows right?
Anyways, trying to install the drivers directly, either natively, or under Windows Vista/XP compatibility incurs a BSOD with the stop error 0x00000131. I attempted to install the drivers and fix them in safe mode - the operation completed successfully, except then windows 7 would not boot up, and instead the computer would restart after the splash screen. Using recovery fixed that through a restore point.
I've also tried installing the drivers directly form the .inf. This also causes a BSOD, however, after restart the drivers are all present, yet the device is not recognized as the sound card, only a multimedia controller, and does not work (even though all the drivers are listed correctly, the error report says they are not installed). Windows 7 trying to fix that, of course, causes the BSOD.
I've even gone so far as to get modded drivers from PAX. Same problem. Since it seems the drivers work fine on windows 7 64-bit, we'll probably have to wait for a fix from microsoft, as it sounds like, to me anyways, an issue with their audio system or driver management on the 32-bit version.
Edit: 0077 drivers are a no go too, though they got farther through the installation before exploding.