Windows 7 64 bit has difficulty installing the current USB drivers for Android devices. You’ll need these to actually test Android applications on a phone.

Feel free to poke around Control Panel for an hour trying to force it to recognize the drivers sitting on your hard drive. It simply won’t comply.

Luckily there is an easy work around– install PDANet. You can remove the program after installation– it will leave the drivers behind.

See:
http://forum.xda-developers.com/showthread.php?t=502010&page=22
http://androidforums.com/motorola-droid/35877-cant-get-tether-work.html