Windows 7 is such a breath of fresh air, isn’t it? Lots of new things to rediscover. If the e260 is a v1 device, the Music folder may be hidden. There are two levels of “hidden” in this case, actually.
The first hint of change is that you mention an earlier version of Windows Media Player. If it was Windows Media Player 9 or earlier, you were most likely communicating with the PC in MSC mode. Even Windows XP, as originally packaged, had WiMP 9. Media Transfer Protocol (MTP), where the Sansa is recognized as a Media Device, began with WiMP 10.
Files transferred in one USB mode (MSC or MTP) are not visible with from the PC, when connected in the alternate mode. On the device, go to Settings > USB mode and have a look. Try switching manually to the alternate mode and see if your music is visible.
In MTP, you will only see the files that were generated on the device, this being the Record folder. If you transferred your music in MTP, let’s “unhide” the MUSIC folder and see if this was your previous mode.
Ah, but wait! That’s not all. The MUSIC folder is hidden by default on the earlier e200. You can transfer with Windows Explorer. In Win7 this is the handy “Folders” icon in the taskbar. Open this window, and let’s navigate in the new interface. Click on the Organize button in the upper left when looking at the Sansa. Select, in this drop down menu: Organize > Folder and Search Options > Click the View tab > Check the button for Show Hidden Files and Folders. Your music folder will now be visible.
Try looking for your music in MSC and MTP modes. I’ll bet they were transferred in MSC; in MTP, however, playlists are in pla format which is much easier.
Using Windows 7 has another treat for you, Windows Media Player 12 , a good player, but Microsoft keeps changing functionalities around. To import your playlists, click on the Sync Tab with teh e260 connected, and you can transfer your media plus playlists from the device to your new PC. It takes a little experimentation withso many changes, but the process is very similar to WiMP 9-11.