Windows XP did not have a "resize" option built-in either, you must have installed PowerToys or some other 3rd party applet to allow resizing.
Resizing is available in Windows Live Photo Gallery (right-click, choose "resize"), if you have that on your system.
or there are several tools you can load for Windows 7, some are freeware, like:
http://www.nirmaltv.com/2009/08/26/image-resizer-power-toy-for-windows-7/
or
http://cybernetnews.com/image-resizer-windows-7/
or some times, when you buy and install an aftermarket photo/album application, it will include a tool to do that.
James Wolf MS-MVP [Media Center]