I'd like to play this one again, but according to Steam you need to have XP or Vista. What OS are you using?
Yeah, on Steam it says only KoToR2 is compatible with W7, and that 1 isn't. But, on the disk version of the re-release, it says that both are W7 compatible.
You can still install it and run it on W7 but it takes some maneuvering- you just have to give the .exe permanent administrator privileges and run it using an XP Service Compatibility Pack.
There's a ton of stuff about it on the Bioware forums if you're interested.