Finally figured out my problem. Here is what I did.
Perform a search and delete all of the following files: Rewire*.*, rex shared library.dll, reason engine.dll.
Delete anything related to propellerhead and reason (folders etc).
Install reason as administrator (win7).
Open Reason the first time to set up the audio and midi etc. Test the functionality and then close it.
In folder options (a windows setting), choose “show hidden files, folders or drives”
Copy rewire.dll and rex shared library.dll from C:\Users\”your name”\AppData\Roaming, and paste it in the C:\windows\syswow64 directory.
Open Pro Tools -> create new aux track and insert Reason.
FYI, my pc worked first time I did this, my laptop took me 2 attempts. It worked for me.
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