This one is potentially painful. If you’ve grabbed the Windows 7 beta and installed it, be aware that there is a known bug with how it handles MP3 files. Here’s the painful part—if your MP3 files contain metadata, e.g. you’ve used Windows Explorer to add metadata to the files, Windows Media Player may permanently remove audio data from the file when you import into Windows Media Player.
The workaround is to either get the update to the Windows 7 Beta that fixes this problem, or to set all of your MP3 files to be read-only, prior to loading them into Media Player.
The last part is a suggestion on the part of Microsoft and a bit funny—Microsoft warning you to set some files to be read-only so that Media Player can’t harm them. Sort of like sending your kids to a known dangerous school and just equipping them with Kevlar.
At any rate, no worries, and no blame. This is a beta, after all. So we definitely expect there to be some hiccups on the road to a final release.
This problem is KB #961367 and you can find full information here: An update is available for Windows Media Center and Windows Media Player in Windows 7 Beta