Sorry, I was in the process of updating this post to solved when this thread disappeared and I thought I had somehow deleted it.
I solved the problem - it seems it was entirely related to my Roland GAIA synthesizer and it's driver. You see the driver allows the GAIA to function as an audio interface as well as a USB midi driver (the part I was using). I wasn't using the audio interface functionality and it was greyed out in the Sonar options, but after reading the readme file that came with the GAIA driver, I realized it had issues with USB in Windows 7.
After looking up the issue in the Windows event log (thank you Scook!) I realized the crash was being caused by something USB related. I disconnected the GAIA, ran MIDI cables instead and PROBLEM SOLVED! No crashes!