I think calibrat.exe will run in a Windows 7 Virtual PC window. I just tried a dry run -- I didn't have any actual data at hand -- and it seemed to work as expected.
Jim Frame
Frame Surveying & Mapping
609 A Street
Davis, CA 95616 framesurveying.com
Are you trying to run it in an XP virtual machine, or trying to run it in a Win7 command line window? The first works for me, the latter generates the error you note. (My OS is Win7 Pro 64bit.)
Jim Frame
Frame Surveying & Mapping
609 A Street
Davis, CA 95616 framesurveying.com