Does Firebird work on Windows Vista or Windows 7?
Yes. Just make sure you uncheck the Control Panel applet option while installing.
Also, make sure you do the installation as administrator (Run as administrator from the file context menu), as otherwise server will not start when installation is complete.
If you wish to use the Embedded, please skip version 2.0.1 as it has a bug. Either use 1.5.4, 2.0.0, or some 2.x version newer than 2.0.1.
Make sure you set the IpcName setting in firebird.conf if you wish local connections to work. With Firebird 1.5 you should use the name FirebirdIPI and for Firebird 2 and above use FIREBIRD. You also need to prefix the name with Global\ to make Firebird service available to all users. Read comment above the IpcName setting in firebird.conf file for more details.
On Vista, you can also connect using variant of connection string that uses hostname, but without any hostname, something like: