I was able to play Liberty's Kids on a Windows 7 64 bit laptop. First I installed the game, then ran the Intel Indeo codec installer from Install\indeocodec. Didn't have to set any compatibility options for either.
I do not have the game to test and The Learning Company has made a lot of games that were very OS specific. Windows 7 has some excellent Compatibility tools though that can overcome most problems with some of these older games.
1. install the game
2. right click on the .exe and pick "troubleshoot compatibility" from there on you pretty much just follow the wizard and it will set it up to run in whatever mode (i.e. xp, win98, etc) it needs to run in. This is not foolproof but it has worked for almost every application of game I have thrown at it.
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