I am able to create an ad hoc WiFi network on my laptop and it is waiting for users. Now when I try to connect from my windows phone 7.5 I can find this WiFi, but when I supply the password it says "INCORRECT PASSWORD" and this happens repeatedly even though I am entering the correct password.
Might be useful if you supply more details, but I will assume that you are using internet connection sharing on your Windows 7 laptop.
I had a similar problem with my iPad and it was due to the security protocol Windows was using for the ad hoc network (for me it was WPA2-Personal). Try changing the encryption to WEP and see if this works.
WEP is not very secure and can easily be cracked, so I would advise using caution.