Identify if optical drive in my laptop is SATA or PATA in Windows 7

Use HWInfo to enumerate all hardware attached to it. It will give a summary page with the things HWInfo maker believes you care most (CPU, Motherboard, GPU, RAM), and the detailed view which will include all other stuff attached to your hardware (as far as they can recognize).

And since they have a zipped / standalone version, you don't need to install it. Check for an entry under Drives - (S)ATA/ATAPI Drives and if your drive is listed under there, it is SATA drive.

• The obvious way to start is to check manual. If you can not find it in the user manual then check the maintenance/technicians manual.
• If you can not find it in the manual then look on-line, e.g. on the manufacturers website. It will either list the 'disk controllers' or the chipset. Look up the chipset. If it is an ICH5 or more modern then it will do SATA and you would need extra (and on the website mentioned) chips to also support IDE/ATA/PATA. So it is has ICHx and no special comments it will be SATA.
• Failing that, enter the BIOS and look for something called AHCI. AHCI is only available under SATA.
• Failing that: the age check: If your laptop is less than 10 years old it will be SATA. If it came with a harddisk larger then 500MB it will be SATA based (both drive and CD/DVD ROM).
• One more, which is rather kludgy. If you can eject a DVDDrive (not just the DVD, but the whole drive) then it is SATA in AHCI mode. (OLd IDE did not support hot-plugging and does not offer this option).

And incase its SATA then is it SATA - II?

It does not matter if it is SATA I , SATA II or SATA III. These are backward compatible. You only need to worry about that if you use something which needs a lot of speed such as a SSD or a dozen HDD behind a port multiplexor.

I am ok with installing 3rd party utilities to find this out.

No third party software might be needed. Try [Start] run'Compmgmt.msc` and go to the device manager. Look for AHCI controllers. If you find any at all you are almost guaranteed to have an SATA based chipset and only SATA based devices.

If you want ot be 100% sure that you do not have a device with both SATA and IDE, then boot a linux or BSD live DC and run either lspci or pciconf. Those will list all devices in your system. Both those with and those without attached drivers.