Ok, it's not only windows7 but also 64 bit architecture.
The exact location where the cloned file would be on a 32 bit system is: c:\Users\<user_name>\AppData\Local\VirtualStore\Program Files\Common Files\Symbian
On your system it is likely c:\Users\<user_name>\AppData\Local\VirtualStore\Program Files (x86)\Common Files\Symbian
If the clone file is truly missing, edit the original (c:\Program Files (x86)\Common Files\Symbian\devices.xml) by adding something like
<device id="S60_Nth_Edition" name="com.nokia.series60" default="no" userdeletable="no">
Where the path must end with \ and contains the components up to \epoc32
Then call devices -setdefault @S60_Nth_Edition and you have one problem solved.
P.S. I'll move this to a more suitable forum, as it has nothing to do with the Smart Installer component. It is only after you have managed to use the SDK and build an example app that you should worry about how to deploy that app to your customers and thus how to package it with the Smart Installer.