In System 7, Remove the "WindowShade" and "Color" control panels from your "Control Panels" folder. The functionality of these control panels have been replaced by the "Appearance" control panel and are known to conflict if both are installed.
If you have an old version of an interface-altering extension/control panel (Aaron, Kaleidoscope and others) you may wish to disable them (unless more recent than this Extension Manager), as they might conflict with the Appearance Manager.