Windows 7: Connect to Android device using WPA2 PSK

I believe the type of connection you're trying to use is WPA2 PSK, which is short for Wi-Fi Protected Access 2 with Pre-Shared Key.

In Windows 7, go to Control Panel -> Network and Sharing Center -> Manage Wireless Network -> Add -> Manually create a network profile

In here, enter your access point's name (SSID, whatever you have setup on your phone). Choose WPA2-Personal as the security type, and choose AES as the encryption type. Type in your password in the Security key box, and you may choose to check Start this connection automatically or Connect even if the network is not broadcasting if you like.

Hit next, and your computer should now automatically be tethered to your phone.