My issue is fairly similar to yours, well, actually, I think my issue is a result of me being a couple steps ahead of you.
To install my printer connected to my Windows 7 PC I had to add an advanced tab to the Add Printer window (control click and drag the Advanced tab over to the Add Printer window).
After doing this under Type I selected Windows and in the url pane I added my Windows 7 smb location (I used the name of my computer so for me it was smb://Emp123-PC).
Then in the Print Using pulldown menu I selected Select Printer Software... and selected my printer.
When I went to print it asked me to log into my Windows computer using my account name and password and hopefully this will be the end of the issues for you.
As for me, when I got to this stage my printer would send the information to my Windows 7 computer (or it appears to anyway) but nothing prints and nothing shows up in the print queue on the Windows 7 computer (Im not sure if this is supposed to happen or what). Any help getting my printer to actually print stuff would be wonderful.