sgip2000, as per your suggestion, I disabled UAC. It made no difference, although it did let me run the compatability wizard, but regardless of the settings I applied (XP w/sp2-3, Vista w&wo sp's) it still wouldn't recognize my OS. It kept telling me to take the computer to a store for an upgrade!
However, I'm happy to report I have my Butterfly back! Out of pure frustration with the Verizon download, I went back to the MSN website. I guess its true what they say," 3rd times a charm". This time around, it recognized my email address & password and installed without a hitch. LIGHTNING FAST, I might add, FIOS is everything they promised.
Thanks again, to all, for your help. At least we know now, that the 7 compatability issue, is with Verizons download software, not the MSN program itself.