arrgggghhh
I wish it weren't so, but the problems you saw are the problems I'd expect when introducing a brand-new Web browser. Much of Microsoft's anti-competitive controversies a few years ago (at about the time IE6 was introduced) revolved around the way that it's more than a Web browser. The components that build the IE browser are also used throughout Windows, such as in Help, some fancy user interfaces, and in all the multimedia components. It really is a part of the operating system, and when you mess with the OS, you will break things.
I'll sit this one out until IE7.1, thank you very much. Never buy the .0 version of anything from Microsoft.