IMO windows 7 handles drivers MUCH better than XP. I always found XP to be such a nightmare.
Anyhow XP was and still is better and easier for flashing drives, but you can do it in 7 without a huge amount of trouble. Basically first thing you want to do is disable/corrupt your via drivers. I dont remember how I did mine but I did do alot of disabling renaming etc etc. Once you get windows to recognize there is a device attached and try then fail to install the driver your in good shape.
Looking at your screen shot your using windows 8 which you shouldnt be. Also it doesnt look like your in test mode. You need to download driver signature enforcement overrider. (
link then enable test mode, sign the portio driver restart then you may need to sign portio again and you should be fine.
Thats how I flash on one of my computers I always have to sign the driver reboot etc etc then I can flash. I've flashed with both windows 7 and XP on the EXACT same rig and when it was running XP the flashing process was MUCH easier, and more reliable.