Thanks again for the advice. The problem mysteriously resolved itself the following day.
I don't know what it could have been... I just want to report one thing - a Beta testing bug, I think:
The shadow is still missing with iTunes...(no shadows whatsoever with any themes). I tried adding iTunes to Windowblinds exceptions ("do not skin") but it didn't help either. Itunes is probably using its own skin (looks quite different from other windows) and it looks like WB7 can't handle it on Win7/
When WB is not loaded, then the iTunes shadow is displaying fine.
Also there were no problems with this with WB6 on Vista (can't test it now though)
This screenshot shows iTunes FOCUSSED (so the shadow ought to display....) Perhaps something to pass on to the development team?
Not a showstopper exactly, but since WB is all about improving the looks of the desktop, it shouldn't be allowed because it's ugly!

Your computer has a Windows Experience Index base score of 5.6
Your Windows Graphics Experience score is 6.4
WindowBlinds version : WindowBlinds 7.0 (build 220 - Windows 7 Edition)
WindowBlinds is installed correctly on this PC
WindowBlinds appears to be activated on this PC
(ACER AL2016W ) 1 is attached to NVIDIA GeForce 8600 GT
Wblind.dll 2009/10/14 20:20:20
Wbsrv.dll 2009/10/09 18:56:18
Wbconfig.exe 2009/10/07 21:35:20
Wbload.exe 2009/10/07 21:35:10
Wbhelp.dll 2009/10/07 21:35:07
Tray.dll 2009/10/07 21:35:19
Wbload.dll 2009/09/25 14:41:29
Screen.exe 2009/10/07 21:35:05