I'm having the exact same problem. iLok installer says I need to update Windows 7, yet my system is up to date. Have tried everything but MC simply crashes when I click okay, rather than starting with limitations to the audio components. Any update on this problem or any solution and/or workaround?

Hi,

Take a look at the fifth post on this thread. That's what solved it for me. There are some other suggestions on the thread if the initial one doesn't work for you.

http://c2.avid.com/forums/t/135100.aspx

IMO this W7 issue is slightly different to the W10 issues that had very similar symptons.  Even though you do not need the iLok manager in that if it fails to install on a W7 machine the error message will  reveal that you need a very specific W7 update to allow the Avid Pace installer to work. 

http://community.avid.com/forums/p/180298/840481.aspx#840481

Second last post.

The default delayed start up for Windows 7 services is 2 minutes.  This causes one of the Pace licence errors on launching MC/SN.

.

FYI - I have just upgraded from 8.6.5 to 8.9.2 and encountered the same error when launching MC.  Visiting the www.ilok.com site, downloading and re-installing PACE driver fixed it for me. Running Win 7 SP1, no updates to Win 7.  I did not manually uninstall MC before performing the upgrade and let the installer remove the previous version.

Since MC 8.8 I had problems with all followng MC updates with the PACE driver. I solved the problem every time  by deinstalling the automatically installed PACE driver and replacing it by the  PACE 2.4.7 driver, using the LicenseSupportInstallerWin64 v2.4.7 r27997 driver (iLook legacy installer). The link is given in 

http://community.avid.com/forums/p/180175/839397.aspx#839397

Try this:

iLok Legacy Installer.

However, after 8.9.1 and win 10 I have never received that error anymore and now I can use the new installer.