When I installed IE7 on one of my development workstations, I did not realize that it was the IE7 that broke it (I suspected, but didn't really know it).  At the time, I did a little light googling, but didn't find anything so, I figured it was just a coincidence.

The problem is that I had my Lotus Notes set to use IE to as my default browser, which allows notes to launch hyperlinks in IE and do designer "Preview in Web Browser" and both of these function failed after installing IE7, but, since I don't use those features often I didnt think much about it.

When I installed IE7 on the second machine, I more than just suspected.   I am surprised that I still can't find anything on this issue by googing it.

So, here is the work around

In your location document, change the internet Browser to Other, then you can pick the EXE of internet explore (like below)