Same thing just happened to me, the dreaded "Your computer is not digital cable ready.."  In the Windows 7 media center menu, go the "Extras" and find the digital cable advisor application (icon shows the end of a coaxial cable).  Run the application and accept the download.  You will not be able to use a digital cable card until you do this.  Once this is completed return to the setup and it should run smoothly.  I just got my first two cable card tuners working and was happy to toss away IR blasters and return a cable box to my provider..