The game is not supported in Windows 7.

If you are having issues installing disc 2 of the PC version of Fallout 3 GOTY (Game of the Year) Edition, please try the following:

1. If you are Windows Vista, disable UAC (User Account Control) and autorun. If you are using Windows XP, disable autorun.
2. Browse to the disc using Windows Explorer, and double-click on EN_Fallout_3_DLC.EXE to run the install for the Addons.
3. If that fails, create a folder on your desktop call Fallout3DLC. Copy all the files from the disc to that folder, and run the fallout.exe file from there to install the Addons.

If you need further assistance, you can also reach us online at http://support.gamesas.com or our technical support staff at (410)-568-3685. Please include all previous replies when/if responding to this message.
Best Regards,
Joel D. at Bethesda Softworks Technical Support
support04@gamesas.com

also be advised that I found it best not to install disk 2 in safe mode
I have win 7 32bit with a new rebuilt comp don;'t feel like write out the specs but I follow these steps and now I am playing fallout and it works
as for the cashing problem that is just a glitch that they had from the get go it will never go away
I hop somene beside me benifits from these instructions

http://www.gamesas.com/index.php?/topic/1052709-game-of-the-year-edition/

I install using safe mode all the time. It works fine.

Also the main reason why it takes so long to install is that the DLC is contained within a 2GB .exe file......which takes some time to be read and verified.