First of all, make sure that you only have ONE USB game controller device plugged in! Note that a joystick with a built-in throttle counts as one, so is fine.

Have you got the CA.INI fix applied?

Are you running in 3DFX mode with a glide wrapper? Switch to Software mode and see if it still crashes.

If it does still crash, try some of the older Phoenix fixes.

You might simply be sh*t outta luck as you have the 64-bit version of Windows 7.