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Eudora does work with Windows 7, BUT not out of the box. In order to make it work you need to install it making sure you change some settings for the user files.
Windows 7 and Vista don't allow programs to store data files in the location that Eudora 7 wants to use. You will need to install it following these instructions:
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I must clarify my response. This issue pertains to Eudora 7. If you are using a newer version of Eudora then you may not have this issue.