I pulled out my CD for Pax II and it does install and run in Win7. You just cannot really play as the graphics are muddled so bad. Anyone try this in DosBox? It is not a Dos game.

Did you try compatibility mod? I managed to get a few games working that way.

Run as administrator with 98 / me compatibility mode.
Make sure it is installed outside Program Files or other system-wide folders.
Open up the Screen Resolution window just before launching the game, desktop -> right click -> screen resolution, and keep it open while you play the game.

??

I think you just answered your own question there ;-)