This is a copy/paste from the thread I made over at AllDroid. Figured some people here might find it useful as well.
Ok, so after seeing how much trouble most people have with Windows 7 I decided to make this. I too found the previous instructions a little confusing, but I finally figured out what I was doing wrong and was able to install them. Trust me, that when I point out what you guys were doing wrong you're going to laugh too...lol
- Download the attached .ZIP file and extract it somewhere you can find it (ie: C:\ADBDrivers_v3)
- Make sure your phone has USB Debugging enabled (Menu>Settings>Applications>Development)
- Plug USB cable into phone and put in USB Mass Storage Mode
- Open up Device Manager (Located in Control Panel\All Control Panel Items)
- Under Other Devices you should now see Motorola ADB Interface (Windows could not install the drivers for me)
- Right-click and select Update Driver Software
- Click on Browse my computer for driver software
- Click on Let me pick from a list of device drivers on my computer
- Now this is the step where I'm sure most of you messed up on. Click on Show All Devices then Next. DO NOT CLICK ON ADB INTERFACE FROM THE LIST!
- Click on Have Disk button
- Click Browse button
- Go to C:\ADBDrivers_v3\usb_driver\ then select android_winusb.inf and click the Open button
- Click OK
- Select Android Composite ADB Interface and click the Next button
- Click Yes on the Update Driver Warning window
It should take a few seconds to install the driver. You'll get a window saying that you driver was successfully updated (click the Close button), and your phone should now show up at the top of the device list under Android Phone.