I`ve noticed in IE7 that all the fonts are antialiased. Can this be turn off? Maybe this is somehow causing a problem.
Internet Options --> Advanced --> Settings --> Multimedia --> Always use ClearType for HTML*.
Although it's been off by default for every installation I've seen (but I've only seen the beta releases). And it only just occurred to me that maybe it just uses default antialiasing instead of switched AA off, when you don't tick this anyway... so might not be helpful to you.
Again, IE7 doesn't integrate into Windows Explorer anymore, so I don't know. It's obviously changed the Internet Settings control panel so god knows what else they changed that isn't related to Explorer but is ;]