Does it support Windows 7 / Vista ?

Sure it does ! All interface options and operations support Windows 7 and Windows Vista, including 64bit.

What about ClearType ?

ClearType font smoothing method is fully supported now.

Why does it need a font database to be created ?

Font database is required to recognize letters and numbers on your desktop. It is an enumeration of all possible font sizes, pitches, and styles. Typically it uses about 2Mb of hard disk space.