Re-iterating what took too long (couple of hours) to pinpoint and solve.

Getting ImageMagick (Imagick) installed on XAMPP 1.7.3 has it right there and clear, If you want to get Imagick installed on XAMPP 1.7.3, you’d need to:

  1. Install the LATEST OFFICIAL version of ImageMagick from http://www.imagemagick.org/script/binary-releases.php#windows . (I first tried installing the one from http://image_magick.veidrodis.com/image_magick/binaries/ specified in the post above, didn’t work here as it’s missing a required DLL).
    Download the Win32 dynamic at 16 bits-per-pixel version.
    Make sure it’s installed in a simple non spaces folder name, e.g. C:\imagemagick .
    During installation, make sure you check the box for “Add application directory to your system path” (otherwise make sure to do this manually).
  2. Download the following DLL – php_imagick.dll courtesy of http://www.sk89q.com (original link).
    Place this file into your php\ext folder inside xampp, e.g. C:\xampp\php\ext .
  3. Edit php.ini (C:\xampp\php\php.ini) and add the following line: extension=php_imagick.dll
  4. RESTART windows. (If you won’t, you might receive the following error: The program cannot start because CORE_RL_wand_.dll is missing from your computer.
  5. Start Apache. it should work well.

Thanks to jerodmoore.com I can now run a fully functional Drupal 7 on xampp on Win7.