In my experience a BSOD has always something to do with hardware. Especially hardware-level drivers (video, audio, MIDI etc.) or memory related issues will cause this problems.
To focus on hardware drivers… A lot hardware manufacturers produce crappy drivers. Sometimes hardware totally not related to the used software can wreck your system. As an example - I had a game that was constantly hanging the computer and 6 out of 10 times gave a BSOD. The first idea was - graphic driver? Nope. Sound driver? Nope again… After much frustration, re-installing etc. it turned out to be… the printer driver! Yep - a driver for a piece of hardware that you will never ever use in a FPS was wrecking the system. I never found out how this would ever be related, but it was…
What I am trying to say here… If you have BSOD’s just ask yourself if there is some crappy driver running in the background. It can be a graphical, sound, dsp or midi driver, but also something (seemingly) completely unrelated like a external disk driver, printer driver, chipset driver etc.
I notice Cubase 7 is taxing your system a bit harder than Cubase 6.5, and hardware or driver problems that did not became manifest with 6.5 can raise their ugly heads with version 7. Do I have any ideas? Hmm… well Cubase 7 is taxing your graphic hardware a bit harder than 6.5. And if I am not wrong 7.0.3 had some changes in the graphic department. If you are using a (relatively) light video chip with less strong hardware acceleration (or drivers that are just not optimized in that field) like mobile devices, it is possible that this will give problems. What I am trying to say here, is that the reasoning that “6.5 runs flawlessly thus 7 is broken” is not completely true.
I am not saying there are no problems, but it does not hurt to make a list of hardware you are using, and check if this hardware works really flawless. As I said - BSOD are in the overwhelmingly number of cases related to hardware or low-level hardware drivers.
My preferred way of testing new software is to keep the old software running, and test the new software on a separate system (yes - I know not everybody has a separate system, but you can use a dual or multi-boot system to do that). I slowly add the soft- and hardware and watch every step if this works without a hitch. Only if I am confident the new software runs flawless enough (this can take weeks or months, and notice I did not say “totally flawless”) I make the switch. This way the frustrations are minimal. Yes - it takes some time and some work, but if you spend a 15 to 20 minutes a day for this kind of testing it will not “eat up” your precious time you have to spend with clients or client-related work.
Anyway - I have tested 7.0.3 on two separate systems, with two window versions (7 and 8) and did not have any problem with it, apart from the niggles (like mixer-strip resizing with Cubase 7 projects). So - it is safe to say Cubase 7.0.3 in itself is not very crash-prone (otherwise I obviously would have crashes). If Cubase 7.0.3 gives a BSOD there must be something hardware related that is causing that. As there are so much configurations possible for a computer system it is hard to say what is the problem.
I really hope the problems will be solved, because haven BSOD’s all the time is no fun. However - if it is really only SB that have to solve the problem remains to be seen. It is possible the hardware makers have to do their part to.