You should have to install tiny umbrella, it should just run on it's own. What version did you download? Does it give you any other info with the error, or just say error 16?
Try to right click on the tiny umbrella icon and click run as administrator and see if that helps you at all. After that I am out of ideas, you might want to try and redownload the file, or possibly find a new source to download from. If that fails still all I can suggest is trying from a different computer.
I am about to try this myself (also running Win 7 Ultimate 64-bit) - run the program in XP mode - I've heard of some issues being caused by multi-core processors that might also be relevant - hoping just running in XP mode will solve the problem!