The GPO setting Point and Print Restrictions allows you to specify where Windows Vista and Windows 7 get their printer drivers from. It also allows you to choose what kind of security prompt is displays on the operating systems. My best guess for why this is happening is maybe the correct driver for Windows 7 is not in the location specified in the GPO. Below is the relevant information directly from the GPO setting:
This policy setting controls the client Point and Print behavior, including the security prompts for Windows Vista computers. The policy setting applies only to non-Print Administrator clients, and only to computers that are members of a domain.
When the policy setting is enabled:
- Windows XP and later clients will only download print drivers components from a list of explicitly named servers. If a compatible print driver is available on the client, a printer connection will be made. If a compatible print driver is not available on the client, no connection will be made.