What is the process to set up a 360 controller to play the game in windows 7. The computer charges
the control and it blink the light but it does not work.

Connect to Windows Update and make sure all the proper drivers are installed. If they are, it should just work when on. (The game will default to the 360 controller if it's detected.)

sounds like you have a play and charge kit
http://www.inglue.com/wp-content/uploads/2009/09/xbox360pnc.jpg ??? that cable right?

if your using a wireless controller you need this the wireless receiver for it to work

http://media.teamxbox.com/dailyposts/xbox360/xbox360-wireless-receiver.jpg

Good catch, I completely missed it.

I have said receiver and the charge kit and they are correct. If it was a "hardwired" controller my solution would work.