There's a report, on the Register, that IE 7 doesn't work with the Google or Yahoo toolbars. I just talked with Dean Hachamovitch, the guy who runs the IE team, and he says that they tested with the Google and Yahoo toolbar and it was running on their machines (he just sent me screen captures of his personal machine running IE 7 with both the Google and Yahoo toolbar installed) and they in no way are trying to block the Google toolbar from working. He says that he commits to everyone to getting the toolbar to work and if there's something that isn't working the IE team wants to know about it so they can fix it.
This link, on Molly Holzschlag's blog (she's on the Web Standards Project) seems appropriate at this time: That's why it's called beta.
Dean also tells me that we have engineers working with Google to make sure that Google's stuff will work fine in IE 7 and Windows Vista.
It's interesting that many bloggers (both pro and amateur) have been giving me crud the past week or two for "being fast to publish" and "not calling sources to check on my reporting" but that the Register, a professional journalism outlet (they get paid for journalism, I do not) apparently didn't call our development teams to check into this report and get their side of the story. I wonder if Andrew Orlowski will link to my blog and correct his story because his report is HUGELY damaging here.