For your comment on the upgrade, the upgrade was successful and FTM showed the proper updated version when queried.
1) I find this curious, as I've done reboots with seeing this message and had no effect. I suspect this may be a separate issue.
2&3) Agreed, though my wife is not terribly good about making backups. I've just set up a NAS to do the backups automatically which will take care for the future, but I have no archival copies to test (that said the current copy work well in 452). Also, there is the option to press "cancel" to stop the program from updating automatically.
4) I did try something similar (creating a new tree then importing) and had no success.
5) In a sense, yes. After doing the restore of the file from archive after 7 install.
If it helps, here is a rough order of what I did.
A) Backup files on computer.
B) Wipe HD, install Win7
C) Restore Backup files
D) Install FTM 220.127.116.112, immediately upgrade to 723
E) Attempt to open tree, fails saying file in use or corrupt.
F) Attempt misc trouble shooting.
G) Uninstall FTM, reinstall 18.104.22.1682 cancel upgrade.
H) Open My Family Tree.FTM with success.
At the moment, she can use it reasonably well, though she does have to cancel the update each time she wants to use the program (which is a minor annoyance). We probably will continue that way until the she get the next major version upgrade, but it would be nice to have things up to date (or at least understand what the issue is).