Yes it can be done but the installer that comes with Oracle7 has some Y2K issues.
We have installed Oracle7 on W2K by using the Oracle8 installer. You do this by first custom installing the 8.0.5 installer. Then with the installer running, insert your Oracle7 client CD. You then browse the CD from the installer by clicking on the from button until you find the nt.prd file. You will then see the list of Oracle7 products on the left side of the installer. Select the client products you need and install.
Sorry, I have never seen that error before. Have you tried a fresh install of all software on the client (including Windows) before you install Oracle? If that doesn't help, I would suggest you log a call with whoever you use for support - that is if you have someone
You can download the Oracle 7 ODBC executable drv25317.exe from Oracle's web site. This contains a new version of the Installer in which the the Win2k bug has been fixed. Run this installer, load nt.prd on the Oracle 7 Server CD, and install any ofthe items on it