The Volunteer Reporter works on any Windows operating system via Windows file sharing. That is, each workstation gets an installation of the software and the data typically resides in the server shared folder giving each workstation user full read and write access. Of course, the Reporter and the data can reside on a standalone computer or one which also shares the data.
By default the Reporter up to version 6.2 installs on the root of the C drive in C:\Reporter. That works fine on Windows XP. If you are installing in Windows 7 64 bit, however, you ought to install the Reporter in the C:\Program Files (x86)\ folder to facilitate Windows' WOW64 that produces 32-bit emulation. (More on 64bit)
Determining your operating system: In System, accessed from the Control Panel or by right-clicking Computer | Properties, you can determine your version of Windows edition and System Type.
The data should not be in the same Program Files folder where the software is installed. If the installation is a standalone or the data is shared via peer to peer with the Windows 7 64 bit computer being the host, put the data folder in a public Documents folder on that computer, again because Windows has built in security concerns about the kind of file installed on the root of C:\ as well as in the Program Files folder(s).
Even for a Windows 7 32 bit computer you should install the Reporter in the Program Files folder.