If its a 64 bit machine it won't work..as Application and Device Control is not compatible with 64 bit OS.

Check this:

http://service1.symantec.com/SUPPORT/ent-security....

Application and device control is the feature which will enable you to block the pen drive .If you want to get this feature you have to install all features of SEP.i.r,If you want o block pen drive in a PC you have to install all features of SEP in that PC.After installing it need a reboot also.
Second possibility is your PC having 64 bit OS.As earlier posters in this thread told Application and device control will not work with 64 bit version.

Can you post the exact rule you used (screen shot of it would be even better) and maybe that will show us why it worked on xp and not 7. Also did it work on any vista machines (if you have them)?

Grant-

If you're trying to block all usb storage devices and can't do it on a 64-bit machine with SEP, Windows Vista and 7 do have that capability built-in.

1.    In the Group Policy Editor, navigate to Computer Configuration → Administrative Templates → System → Device Installation → Device Installation Restrictions.
2.    Double click and enable the setting "Prevent installation of devices not described by other policy settings".
3.    To allow administrators to install devices and update drivers, double click and enable the setting "Allow administrators to override Device Installation Restrictions".
4.    Navigate to Computer Configuration → Administrative Templates → System → Removable Storage Access. 5.    Double click and enable, "Removable Disks: Deny Read
Access" and "Removable Disks: Deny Write Access".

For a stand-alone machine, use Start → Run → gpedit.msc to open the Group Policy Editor.