I assume that your using the SU-25T, when you hit "7" you then press "O" to activate your TV targeting. Use the slew controls, (Same as for the Maveric targeting, or selecting A2A tgts on the radar) and highlight your target hen press "TAB" to lock the display onto it. After that, press "SHIFT-O" to engage the Laser range finder/designator, and launch when you get the "LA, Launch Authorised" lessage in the Hud.
A Usefull tip might be for you to go through the training missions, they really are a lot of help, I just wish they were more interactive.