I managed to get the game to work on win 7, but I'm not sure it it'll be a reliable fix, or if it just worked for me. posting it here just in case it helps someone else.
I managed to make the game work by ticking these boxes on the BA2.exe properties:
-running it in compatability mode for windows 98/windows ME
-running it in admin mode
-running it in 640x480 screen res (doesn't actually lock the screen res, you can change it in-game. so long as you keep this box ticked it'll still work)

My system:
win 7 64 bit
AMD FX-6300 CPU
2x XFX radeon HD6850 GPUs
ASRock 970 extreme 3 mobo
8GB RAM

hope this helps some people having problems
(FYI I dont actually own a steam version, I have an old box copy)