Problem: If QTP 10 is installed on Windows 7 and IE8. QTP does not recognize Browser Objects. Browser is recognized as Windows object and WebEdit is recognized as WinObject.

Both patches to support IE8.0 (qtpweb_00037.exe) Windows 7.0(qtp_00644.exe) need to be installed for QTP10.0
You might need to check your UAC settings on windows 7.0
Try the below settings:
1)IE: Select the “Enable 3rd party extensions” option under Tools –> Advanced section in IE
2)Open Control Panel, choose User Accounts and Family Safety >> System and Security Settings>>Change User Account Control settings>>Set the control to ‘Never notify’ and restart the computer.
You should now be able to use QTP10.0 on Windows 7 with IE8.