Well... I can't actually verify it will run in Windows 7... but Windows Vista is not listed as a support platform either. I'm running Vista on my laptop. I decided to take a chance and made the purchase. It downloaded and installed just fine. Runs great. FYI: You will need to download Steam and create an account if you don't already have one. The instructions for setting up a Steam account are included as part of the Amazon download package. Pretty impressive game for the price!
UPDATE: Yes it win run in Windows 7. Curiosity got the better of me. I loaded Psychonauts on my wife laptop which is running Windows 7. No problems! NOTE: While digging through some forums to see if it would work, I discovered a known bug of sorts with "some" Win 7 installations. (Its not happening on my wife computer... but here's problem and the fix > When the game goes to a cut-scene (little movie section) "some" computers running Windows 7 will crash. In this case, (per the manufacturer) the most reliable fix is to run the game in Windows 95 compatibility mode. You can do this by finding your Psychonauts exe, right clicking on it, clicking on the Compatibility tab, checking "Run this program in compatibility mode" and then choosing Windows 95 from the drop down box.