It is a 7 speed cassette that was on my old Fuji Monteray (although probably not new on that either). I will pick up a narrower chain, but that is a good idea having the LBS look at it... Not sure why that wasn't my first idea as I'm always in there buying things. The chain is the one that came on the bike, and I'm not sure what the freewheel is.

I thought that I adjusted the screws, but that may have been when the bike was still on the old wheels, so I will have to check on them again.

Thanks for the advise everyone.