Re: dollhouse or American Girl doll for 7 YO?
I have a 7 year old and my vote would be for the american girl. They are very different from the bitties (IMO) and at my house get much more play. A great gift would be an AG doll and a cheap pink tupperware thingie from walmart full of small doll sized hair accessories. You can get a metal bristle hairbrush from sally beauty supply if you don't want to buy the AG one.
The good thing about AG dolls is that you can always add on to the gift in the future by picking up lots of fun accessories for play at walmart and target (my dds favorite is the baking set from target). Ikea beds also make perfect beds for AG dolls for only $20.
Check craigslist or ebay for deals. If you think she'll enjoy dollhouse play, get her some polly pockets for her current smaller size dollhouse. These are what my girls play with ALL the time