Remote Server Administration Tools (RSAT) for Windows 7 cannot be installed on computers that are running Windows 7 with Service Pack (SP1). The error message is “This update is not applicable to your computer”. This is because Service Pack 1 includes updates components for RSAT.
The resolution is to install RSAT tools before installing Service Pack 1 for Windows 7. If SP1 is already installed, uninstall SP1, install RSAT tools, and then reinstall SP1.
According to RSAT download site, RSAT for Windows 7 with SP1 is scheduled for release in Spring 2011.