I have the same situation; I have Windows 7 Pro 64 bit, and many of my old DOS and Win95 apps don’t run in Windows 7...
However, the free Windows XP (32 bit) virtual PC works perfectly, including real-time hardware access. Download the virtual PC for Windows 7, and you end up with a complete version of 32 bit XP that you can run in its own process, and has all the capabilities of normal XP Pro.
I had read about that Virtual XP in Window7, but that is only for the Pro and Ultimate versions. It doesn’t work in the Home version.
I also read some about Dosbox. If I do get a Win7 machine, I will try Dosbox. I don’t need it for DOS programs on my XP machine.