A step in the right direction, and certainly an improvement over IE6. I've read the complaints about performance - I have to say I'm satisfied with the speed - no different from Firefox in my opinion.
There are some difficulties with certain sites - my housemate mentioned that myspace crashes 7.0 repeatedly, the (most recent) flash plugin apparently causing the problem.
I've read that the intention isn't to beat Firefox or Opera, but rather to give new Vista users less of an excuse to try them.