Software. An operating system, specifically.
No, it is software
The microprocessor is a piece of hardware, not software. Windows 7 doesn't supply a microprocessor.
Windows 7 is software because you install it on the computer. Hardware is physical and you can touch it with your fingers. EG printer. A printer is hardware because you can touch it.
No as no software is compulsory
None. Windows is software, not hardware.
device driver
No, it is software.
It depends on many different things including but not limited to your budget, hardware, software you are planning on running (some of it is not compatible with windows 7). Overall windows 7 is more stable than windows xp but requires sufficiently higher resoureses.
No. Windows 7 is systems software.
An extremely large range of hardware and software will work with Windows Vista. It would be impossible to list here all of them.
No, it is a software application that runs on hardware.
Windows Media Player is a piece of software - not hardware.