I finally got on with tech support at Bentley and found out some things. It turns out that v8 and v8i are both compatible with Windows 7, so that clears up that question for anyone else wondering.
The geopak not loading correctly was either my fault during the install or the installer itself, (it's hard to tell at this point) It turns out that the geopak.cfg file was installed or saved in the incorrect location and the v8i version was trying to access the v8 configuration, while the v8 configuration was not even in the correct place, so consequently it wouldn't load at all. The tech support guy copied the respective geopak.cfg files to the correct folders and voila! everything worked. It all comes down to having the .cfg file in the correct location so that Microstation knows where to find it.
For reference here are the file paths that they were saved to:
for the V8 2004 edition
C:\Program Files (x86)\Bentley\GEOPAK
C:\Program Files (x86)\Bentley\Program\MicroStation\config\appl
for the V8i installation
C:\Program Files (x86)\Bentley\GEOPAK\V8.11
C:\Program Files (x86)\Bentley\MicroStation V8i (SELECTseries)\MicroStation\config\appl
To tell the difference between the two cfg files look for the following lines near the top of the file using Notepad to edit:
for V8i - % if defined (Load_GeoPak_SS2)
for V8 - % if !defined (GPK_Start)
Hope that helps someone else down the road that runs into a similar issue. Thanks again for the input and help!