FotoWeb sets the Python path in the registry (HKLM\Software\Wow6432Node\Python\...) to point to the bundled Python interpreter in the FotoWeb installation folder.
If the Python path is already set, FotoWeb does not change the existing path. This is to prevent modifying existing Python installations at least when not using IIS. (When using IIS, you cannot run your own Python interpreter on the same machine as FotoWeb, but when using Apache it is possible.)
When installing to FotoWeb 8.0 the path is changed to point to the FotoWeb 8.0 installation folder. After downgrading to FotoWeb 7.0 it will not be changed back (because of the rule above).
1. Open regedit
2. Go to HKLM\Software\Wow6432Node\Python\PythonCore\2.7\PythonPath
3. In the "(Default)" value, replace all "8.0" by "7.0".
This is only necessary when using IIS.