Nexus 7 Tablet & Galaxy Nexus Phones don’t support USB Mass Storage Mode. They support Media Transfer Protocol (MTP). You can transfer files like photos, videos, music using MTP between Windows computers & android devices.
Newer versions of Windows like Windows 7, Windows Vista support MTP automatically. You don’t need to do anything. You can connect Nexus devices using USB cable to Computer. Windows recognizes android device and lists it as drive on your PC. You can transfer photos, videos, audio files between computer & nexus 7 or Galaxy Nexus.
But for Windows XP OS, you will need to download newer version of Window Media Player if you don’t have it already. MTP is part Windows Media Player.
You can download Windows Media Player 10 or higher on Windows XP, Windows XP Professional computers. Please make sure to download correct version of Windows Media Player depending on the service pack you have.
Look at the system requirements pages on these pages to select the version you need. After installing media player, you should be able to connect & transfer files between pc & nexus devices.
If you are using older versions Windows like Windows 2000 etc, you will need to install Media Transfer Protocol Porting Kit
You can read more about MTP on the wikipedia site.