Recently I’ve been trying to figure out how to install the Microsoft Loopback Adapter on Windows Vista since I couldn’t find an “Add New Hardware” option for manually installing devices like there was in Windows XP and other legacy versions of Windows. Windows Vista caters to the plug-and-play world which will be great for most users, but it leaves those of us who need to do things like install the Microsoft Loopback Adapter scratching our heads. I finally figured it out, so I wanted to share my learnings here.
The trick is to open the Device Manager and then right-click on the root node of the device tree (which should correspond to your machine name). Then select “Add legacy hardware.” If you’re used to the “Add New Hardware” dialog in Windows XP then the rest of the steps (steps 7-11 of this article) will be self-explanatory.