Success!
I had to right-click on device and 'update driver' -> browse computer -> let me pick from a list -> select an
different name for the device (this is what it was called under XP - Windows 7 insisted on loading it as something else which was causing the problem) -> have disk -> locate driver on desktop.
The second driver I chose - which is not the newest one - works and I now (after 2 weeks of pulling my hair out) have a working wireless connection!
Thanks for your help.