I posted in a thread about lag during CoD4 yesterday, just posting in here to add my two cents on PB.
CoD4 and PB work PERFECTLY on my W7 machine.
I installed CoD4, no problems, joined a server, played for a few mins, PB kicked me stating PB version was wrong, I went to the PB website, downloaded the manual updater, manually installed the newest PB update, and everything works. no problems apart from weird lag (100 - 150 ping where it should be round 40)
Seriously, apart from PB not updating itself (I've had that problem pop up in Win XP loads of times) CoD4 + PB work just fine.