10NL - Easy fold - Busted draw - How Else to Play?

[RuFFNeXX]

I don't have a problem with the outcome of this hand. It seems like an easy fold to me. Note that I am essentially the button as the real button is sitting out (explains the PFR). Also, villain seemed to be very loose after the first ~ 20 hands. I had another hand like this against him, which I won without a showdown. My stat for the session (40 hands) was 17.5/15/6.

Please critique my play on each street including preflop. Let me know if you would've done anything different. Just trying to get better.

Full Tilt Poker No-Limit Hold'em, $0.10 BB (5 handed) Hand History converter Courtesy of PokerZion.com

MP ($4.90)
Hero ($10.40)
SB ($5.30)
BB ($5.10)
UTG ($1.95)

Preflop: Hero is Button with 7[img]/images/graemlins/diamond.gif[/img], 6[img]/images/graemlins/diamond.gif[/img].
<font color="#666666">1 fold</font>, MP calls $0.10, <font color="#CC3333">Hero raises to $0.5</font>, <font color="#666666">2 folds</font>, MP calls $0.40.

Flop: ($1.15) 7[img]/images/graemlins/heart.gif[/img], 4[img]/images/graemlins/diamond.gif[/img], 3[img]/images/graemlins/diamond.gif[/img] <font color="#0000FF">(2 players)</font>
MP checks, <font color="#CC3333">Hero bets $1</font>, MP calls $1.

Turn: ($3.15) 8[img]/images/graemlins/heart.gif[/img] <font color="#0000FF">(2 players)</font>
<font color="#CC3333">MP bets $1.6</font>, Hero calls $1.60.

River: ($6.35) T[img]/images/graemlins/heart.gif[/img] <font color="#0000FF">(2 players)</font>
<font color="#CC3333">MP bets $1.8 (All-In)</font>, Hero folds.

Final Pot: $8.15

[Rottersod]

PF raised is OK. Flop I bet $1.2 to try to get him off a draw hand (since you also have essentially a draw as well as top pair no kicker). I'd just prefer to take it down then. Turn I fold. Your probably only drawing to a flush now.Even a straight may be countered.