You cannot install any MDAC release into Vista or Windows 7 (whether 32-bit or 64-bit). MDAC has been replaced by DAC, and these are protected system components you cannot overwrite with old MDAC versions.
If you really want to continue using DAO instead of rewriting for ADO you might consider using DAO 3.6 instead. This would probably involve the fewest program changes though you might be forced to use Jet 4.0 instead of Jet 3.5 with it. As far as I can determine Jet 4.0 can still work with an old "Access 97" MDB file - at least it can from ADO.
Your application installer will need to deploy DAO 3.6 since it is not part of DAC 6.x (Vista and later).
Note that DAO36.DLL needs to be deployed to a folder named:
C:\Program Files\Common Files\Microsoft Shared\DAO
Most application packagers should be aware of this and choose the corerct location automatically. Some are not so smart.
The VB6 SP6 merge module for DAO 3.6 is "aware" of this and the PDW seems to be as well. If using a 3rd party packager you may want to verify it. System32 is not the correct location for this library.