The PowerPivot that comes off the SQL Server installation media is intended for integration with SharePoint. For Excel itself (locally on your desktop), you need to download a plug-in from www.powerpivot.com. Did you do this?
Make sure you download and install the 32-bit plug-in, as you have Office 32-bit. Even if you have a 64-bit OS!
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MCSE Business Intelligence - Microsoft Data Platform MVP