No, it won't work on Windows 7 as there's no compatible driver for it. It's an old, discontinued model which hasn't received any new drivers since Windows XP.
Had the Same problem (today) updating a XP PC (P4 series) to Windows 7... (since XP is now discontinued) BUT No driver for the Soundcard (SB Live! 5.1)
Did a google search, tried the 3th party driver (works) but did get errors and even a BSOD...
SOLUTION That Works Using Creative Drivers:
Find your installer CD that came with your SBLive.. (or find torrent of the ISO -> search for: Soundblaster)
Copy the Driver directory to your HDD (or USB drive)
then select the EXE file in the Root and go to properties, then select to run in: XP SP2 comp. mode.
Then run the EXE..now it will install the "old" WDM driver and you got sound... I disabled the Game Port after install..
Seems to be stable.. got sound and no futher issues...
For what its worth when I was cleaning up I came across an old Dell Dimension 8300 with the SB 5.1 installed, an old set of Logitech x-530 speakers (neither of which had been used in years), and had an uninstalled copy of Windows 7. The temptation was more than I could stand and it all worked together with the the default W7 drivers. Now I'm looking for an old lost 2TB drive to dump all my music on to for listening in the garage. Sometimes you get lucky and the old junk lives!