Unlike when you install ruby, when you install python on windows 7 the environment variable is not set. This means that you will have to put the full path of your python installation in to the command line to execute any commands.
To set the path of your python installation in an environment variable follow these steps:
click the start buttong
right click computer and select properties
click "advanced system settings" on the left
the system properties windows should open
make sure the "advanced" tab is selected
click the environment variables button at the bottom of the tab
you will see a window open split in to 2 windows "user and system variables"
click new on the top one (user variables)
click new and enter "Path" as the variable name
"C:\Python26;C:\Python26\DLLs;C:\Python26\Lib;C:\Python26\Lib\lib-tk" (without the quotes) for variable value
switch the path to wherever your python installation is. done, reopen the command prompt and when you type python you should see details of the installed version.