I agree, if it's showing up in device manager, the beads are working. It wouldn't show up in device manager if they didn't, as it wouldn't receive the USB ID to recognise the device. So the hardware is good.
As for the driver, try running the installer in compatibility mode, and see if that helps it. You can do this by right clicking the installer file, go into properties, into the compatibility tab, and then choose win 7 as the OS. It may be enough to get it to work. It may also be worth trying it as an administrator, and also maybe try running Ableton Live as an administrator, as I find a lot of times with older hardware, it is just permission problems in newer OS's. Older software isn't aware of the newer OS's security protocols, and can end up blocked in parts of the system by the OS. Administrator mode can bypass this.