I guess this is too tough a question to answer! So I went off the board and tried the latest Vista drivers and downgraded to those. Apparently that worked because not only do I get the Intel Graphics Control Panel to appear with all the OpenGL settings selectable but there is no high CPU utilization in igfxext.exe.
So there is a problem with the W7 drivers on an installation of W7 whereas the Vista drivers work fine on W7? What's up with that?
Seems to me that Intel needs to recheck their W7 drivers for this particular chipset/graphics adapter.
Not a real solution in my opinion.