If it says "cheat used" then the cheats actually are working. That flag is only set on the save game if you have actually entered a cheat. What cheats have you tried using and what happened when you tried to use them?
How do you know they didn't work? For example, after using the invulnerability cheat, were you able to be killed? What specific items did you try to add with the "giveitem" cheat (not all item codes will actually work)?
That is really odd. The fact that your save file is now labeled with "cheat used" means the cheats are actually enabled correctly and are functioning, however, the fact that it appears that they are producing no effects would usually indicate user error (i.e. you mistyped something), but it would seem that you are at least aware of the proper usage of the cheats. Frankly, I'm stumped, by all rights everything should be working and there is nothing about Win 7 that should prevent that. My only suggestion is what Alutemu proposed: use the save game editor instead.