AMD's Terry Makedon send out a clarification about the driver support for DX9 hardware in Windows 7:
WDDM1.1 (Windows Display Driver Model) is the driver architecture required to run Windows7. To meet the Microsoft dictated requirements, GPU’s must be DirectX10 and later level hardware. So as stated on our website, Windows 7 users with DirectX 9 AMD graphics hardware can use the legacy Windows Vista WDDM 1.0 drivers (as it is not possible for DirectX 9 hardware to support the WDDM 1.1 driver requirements). On a separate note the move to "legacy driver" status happen when we moved our DirectX 9 based hardware to a legacy support structure back in March 2009, and we were quite public about this. We’ve been providing updates to this driver on a quarterly basis - in fact we will be posting a new legacy driver in the next few days.
Summary: Windows7 users on DirectX9 can and should use the legacy Catalyst driver which will be updated quarterly.