If the cable just works fine on the same system with XP, then it is not parallel port setting in BIOS problem. It is driver for windows 7 problem.
Was Win7 claimed to be supported in your version of Altera Quatus II?
On 64bit systems this can happen if driver is not properly signed. But I don't believe much in MS docs w.r.t. their signing policies. You have 32-bit systems.
You can go to the device manager and see if the device is visible there. If it is check the driver details. If it is a signing problem, you'll be able to find a warning there.
If not problem is reported on any of the driver details tabs, you should note the files associated with driver and then verify manually that they exist at their requried place. In case one is missing or corrupt, you may copy the driver files manually from altera's folder (\altera\91\quartus\drivers\usb-blaster).
OR
You may simply try to do a manual 'driver update' using \altera\91\quartus\drivers\usb-blaster