A lot of people are having trouble with Ableton Live 7. This is especially true with MIDI functionality. It stems from the fact that Live 7 defaults to the DirectMusic MIDI interface. Apparently DirectMusic then has to do emulation because the standard Microsoft MIDI driver is not DirectMusic native (Microsoft, we will never understand you..). This is true for most USB MIDI devices.
This was affecting me by introducing high latency into MIDI I/O with my
Novation Remote 61 SL and Akai MPD24. Initially all seemed well.
Gradually, hitting a note on my keyboard would get slower and slower until the point where it was unusable. We're talking hit a key and wait tens of seconds before the note plays.
Luckily the fix is pretty easy. Open up the MIDI preferences, and click the small arrow next to all your inputs and outputs. Now simply click the port type and it will change from DirectMusic to MME.
According to the forums, there are no drawbacks to this approach. It is unfortunate that Ableton decided to make this a default since so many people have had troubles with it.