If you selected phonetic input, you probably wanted pinyin, but the default is zhuyin. That will enable Windows 7 Chinese input. Select the one you want (probably 'phonetic' or 'new phonetic'). When you click on the language, a tree of input options for it will appear. Scroll down to the Chinese language you want, e.g. Another window appears showing input languages you can add.
Another window will appear showing the currently available keyboards. (Don't worry, this won't disable or change your English keyboard.) In that window, go to the ‘Keyboards and Languages’ tab. The first option for Chinese input in Windows 7 is to use Windows’ built-in IME (input method). You can use Chinese input in the English language version of Windows 7, regardless of which Windows package you’ve got (Starter, Home Premium, Win 7 Professional, Ultimate etc.) Enabling Windows 7 Chinese input Windows 7 Chinese input is very easy to enable and use, especially compared to earlier versions of Windows.