Welcome to the forums,
I don't know what help we can have with Jasc providing you a free upgrade, since they've been defunct for several years. I know that Corel does not provide free upgrades.
Before one of the Corel reps jumps in here with the "canned response" of it's not compatible with Win7, I'll ask are you able to, and are you running PSP 8 under compatibility mode? Aside from that, make sure that you change any special desktop appearances, such as in Vista, it was called Aeros, try running Windows Classic. The older programs don't much like the new desktop stuff, they were not written to know what or how to act with them.
Finally you can download the trial version of PSPP X3, to see if it might be time to upgrade. Just click on the Free Trials located at the top of the forums, nestled between the Corel Store and Patches and Updates links.
I still have Jasc PSP 9, running on my WinXP machine, and I haven't even attempted to install it on my Vista machine.
Ron Petersen, Web Board Administrator