Hi there :)
Try this, right-click on any jpeg image on your harddisk and choose "Open With..." or if there's already a list there click on "Open With" then from the bottom of the list click on "Choose Program..."
Either way, you'll be presented with a list of programs. From that list find "Paint Shop Pro 7" or "PSP7" then click on it and make sure you tick the checkbox labled "Always use the selected program to open this kind of file" finally click OK.
PSP7 should now open with the image you right-clicked on at the begining. This would be a good sign. Close it and try to double click any other jpeg image and see if it now will open with PSP7. Hopefully it will.
I hope that solves your problem :)
Ciao for now.