This is caused by the Microsoft Smartcard PnP service, which can be disabled by adding the following registry key (Although this is a simple fix, note Microsoft's advice: This is the least-recommended option. You should use this option only if the cards are legacy cards and there are no plans to implement smart card minidrivers in future.)
HKEY_LOCAL_MACHINE\SOFTWARE\Policies\Microsoft\Windows\ScPnP
EnableScPnP REG_DWORD 00000000
You'll probably need to reboot as well.
http://www.hidglobal.com/main/technical-support/
http://support.microsoft.com/kb/976832
http://lazybit.com/index.php/2010/10/20/smart-card-driver-for-windows-7-popup