I have had this problem on Windows 7 with my Acer laptop TravelMate 4220. I believe anyone with integrated Intel graphics will experience this problem on a Windows Machine.
I loaded Linux on the machine where the laptop keyboard worked perfectly and so I eliminated the hardware problem. I also tried different drivers in Windows 7 and updated all the chipset drivers and graphics drivers to no avail.
I tried the FN + F7 solution as that is what is presented to no avail. After looking into the Intel Graphics control panel running in the task bar I found a section called HOT KEYS. I disabled the HOT KEYS and immediately my laptop mouse and keyboard started working.
In fact I am typing this solution using the laptop keyboard. This is now after months of this bugging me on a perfectly working laptop.