Windows – Installing 32 bit app to c:\program files in 64 bit Windows 7

Your application is a 16-bit app, not a 32-bit app. In Vista they warned everyone that 16-bit support was going to go away - and go away it did in Windows 7.

Because you have Windows 7 Pro (for later readers all "higher" versions - Business, Ultimate, etc. - support this as well) you can use XP Mode to run older apps in an XP Virtual Machine. Paul Thurrott has a good article on this.

The reason for this is simply many older installers either do not understand the new file structure and plonk everything in the standard program files directory or you are looking at a smart program that has a few 32-bit components which are being copied there.

Your best bet is to download a new program - such as x64 Winrar and just see where it installs to just to rule out a problem with your machine.

As for messing stuff up - it can, but it really depends on the program, there is no one answer fits all... some smaller, compact programs with just a few files should have no problem, where as, if you talk about Office, Adobe or any other "suite" or large program, it will most likely fail as they have many shared components that are cross architecture.