Firebird 1.5 was written (long) before Windows 7, and before things like UAC existed. It may simply be that Firebird 1.5 doesn't work correctly with Windows 7, or that it requires additional effort to work. I'd suggest to install Firebird 2.5.2 (update 1) as that is the latest version and is known to work with Windows 7.
Another problem might be that local system connections don't work as I seem to remember that Firebird 1.5 uses an older local protocol which doesn't work on newer Windows versions. This protocol was replaced in Firebird 2.0. To workaround that you need to include the hostname in the CREATE DATABASE
or CONNECT
statement, so for example:
create database 'localhost:C:\test.fdb' user 'SYSDBA' password 'masterkey';