Can i use a 10 speed hubbed wheel on my 7 speed/cassette bike? I ride a 2005 Claud Butler San Remo with a Sora 7 cassette on the back. My back wheel has broke and is not repairable and I have bought an Ambrosio WS23 Wheel (700mm) with Bianchi hubs which I believe had a 10 speed cassette on.

I have been told it needs to be a Campagnolo cassette but can't seem to find any 7 speed cassettes from Campagnolo? Could I put an eight on it? Would i need a spacer? I want to know what my best/cheepest/easiest option is or should I just forget about it and try and get a Shimano hubbed wheel?
Getting a 7-speed (or indeed any) Campy cassette wouldn't do you much good anyway since the rest of your drivetrain will be Shimano. As you've discovered the two don't mix. (Or rather, they are not supposed to mix and you can expect problems if you do try to mix them. Never say never, I guess!)

I reckon your cheapest option could be to visit your LBS and to see if it is possible to take the wheel you bought, and to swap the Campy freehub to a Shimano freehub. I have no idea how easy this would be or how much it would cost. Worst case the LBS may want to rebuild the wheel, although there could be an easier way, I don't know.

Next option, as you've identified, is to get a new wheel with a Shimano freehub - any chance you could exchange the wheel you just bought? Normally there's no cost difference between the two freehubs. But as long as you have a Shimano freehub you should just be able to slip your existing cassette back on (provided you have the right tool).

In terms of expense, I wouldn't recommend trying to fit the drivetrain to the wheel you just bought, that will mean several part replacements and costs will mount. You also need to be careful if you start thinking along the lines of upgrading your 7-speed cassette, certainly when you get to 10-speed, things like chains and derailleurs come into play, so you may need to replace more than you bargained for.