When you install a new Plug & Play compatible device, Windows 7 checks the driver store first to see if an appropriate driver is available. If yes, installation proceeds immediately & automatically.
If Microsoft Update detects that you are using an older version of a particular Driver, it will immediately offer to update the driver with a compatible newer version.
If no compatible one is available, it will prompt you to search for driver software. Windows 7, will by default, install drivers from trusted publishers without prompts. In other cases, you will be presented with a consent dialog box.
Anand Khanse is the Admin of TheWindowsClub.com, a 10-year Microsoft MVP Awardee in Windows (2006-16) & a Windows Insider MVP since then. Please read the entire post & the comments first, create a System Restore Point before making any changes to your system & be careful about any 3rd-party offers while installing freeware.