I have the same problem with the "Kernel mode driver not installed". I use a laptop hooked to a docking station. The docking station has a parallel port. The docking station requires no drivers at all it just works... so I don't know what driver should I use.
I had windows 7 64 bits and just removed it and installed XP -ONLY- to be able to use my FPGA boards. I have many projects that use old FPGA cards so I need to use the byteblaster cable. With windows 7 I had the same problem with Xilinx, but once I moved to XP all the Xilinx cables (parallel port based) work ok! only Altera brings these problems.
Any thoughs on how to make it work?