I'm afraid the answer is "it won't due to new security features", but I'll ask anyway.
I have a USB Flash Drive I run Portable Applications on (who doesn't, right?). I use PStart to start up a nice menu I've been using for a couple years, have my configuration dialed in to something that is productive, so I'm not inclined to just switch to another program.
I have an Autorun.inf in the root of the drive. Its contents:
[Autorun] Open=Applications\pstart\PStart.exe Action=Start PortableApps Icon=Applications\PortableAppsMenu\PortableAppsMenu.exe Label=PortableApps
When I insert the device on Windows 7, I get prompted to choose from a variety of autostart things I don't want to do:
It worked fine on XP and Vista, on inserting the PStart.exe would start up and I have menu.