In KDiff3 Windows installer you can select Integration/SVN Merge tool. That works fine on 32 bit Win. On 64 bit, however, that does not work, as Win7 installs 32 bit KDiff3 to "c:\Program Files (x86)\KDiff3\" by default, while diff3_cmd.bat refers to the traditional location.
The easiest fix is to change diff3_cmd.bat a bit:
if exist "C:\Program Files (x86)\KDiff3" (
SET DIFF3="C:\Program Files (x86)\KDiff3\kdiff3.exe"
) else (
SET DIFF3="C:\Program Files\KDiff3\kdiff3.exe"