Can you run the PhysXRegInstaller with admin rights? (Or run it from command prompt, I believe Win7 command prompt has all rights.)

If this did its job correctly, you should find this binary value in your registry:

HKEY_LOCAL_MACHINE\SOFTWARE\AGEIA Technologies\enableLocalPhysXCore

[Linked Image]

(You can start up the registry by pressing START, the click RUN, then type regedit and hit OK. There is no need to change anything, I would just like you to check if that key is there. I smudged the value cause it is the MAC address of a computer.)