FIRST, do I understand correctly that Device Manager does NOT show you that scanner? As long as it is connected via USB and its power is turned ON, Device Manger should find it somewhere. To be absolutely sure, do this. In Device Manager click on the very top line for your entire computer system. Then in the top Menu click on Action and choose to Scan for Hardware Changes. This will ensure it does find the scanner. Now, go down through all the main entry lines of the Device Manager list and left-click on each to examine the detailed sub-lists of devices. The scanner must be in there somewhere. When you find it follow my Steps 2 through 5 above to Uninstall it. As I said in Step 5, that probably will re-install the old driver you had. Try it out to see if it works.
Now, if that still does NOT work properly, you need to update the driver. Try this, BUT I suggest the SECOND of these options to ensure the latest Driver.
When you have the CD in the external player and your files are shown, you need to figure out which one is the installer. Apparently your system does not figure that out itself and automatically run it, so you need to do that manually. It will be a file with the extension .exe, and probably will have a name that hints at install or setup or something like that. RIGHT-click on it and select the option to Run as Administrator.
HOWEVER, that CD is old and will have drivers etc. for Win XP. That may or may not work in Win7. So your BETTER alternative is to go to the website of the scanner maker and search for the latest driver suitable for Win7. I did that by searching for Epson V300, and the Epson site asked for a specification of which OS version you have so it could offer a Driver and Utility package ver 3.50+. As a test I downloaded that and it turned out to be one .exe file that landed in my Downloads Folder. Just right-click on that and Run as Administrator.