[basilray]

I would do this:

1. Turn off phone
2. Hold the Vol Down button and then press and hold power button
3. Phone should go to bootloader and say "Serial" at the bottom
4. Plug into PC
5. Phone status should change to say USB
6. Assuming the phone stays in USB, run the unlocker

-If it does not - make sure you have installed WMDC (Windows Mobile Device Center).
-Try running the CD that came w/ the phone as the drivers may not be working/installed
-Try a different PC if you can - could be a Win 7 issue (although there haven't been any major issues that I've seen people mention)
-If it does the same thing on another PC, you may want to try a different USB cable
-If you try a different PC and cable and it's still not working...you may have a bad phone