My wife installed IE7 on her machine and I have used it a little bit. IE is certainly more bearable with tabs, but I am surprised by the default settings (i.e. the minimal number of visible navigation / menu items). I say "surprised" because I don't know if the average computer user (who is already familiar with IE's old layout) will like the UI changes (i.e. is the new UI intuitive? It's hard for me to be objective, but I don't think it would be for the average user). Personally, I don't mind the new aesthetics. I like that the default UI is cleaner.
I still haven't used IE7 long enough for a verdict. IE7 will never be my primary (or tertiary!) browser, but I still want to see how it stacks up against the others.
I have already tested some web designs in IE7 and I can tell you that it is still not compliant to some basic CSS standards. At least I can use conditional comments to try to fix things, but honestly, it's really annoying to have to do this in the first place (I have conditions for IE5-only, IE6-only and now there are some IE7-only things to add!).
I really liked IE when I switched over from Netscape (since Netscape went to crap). Outside of that, IE5 for mac osx was probably the most inspired browser I've experienced from MS in recent memory. Sure, you can laugh at it now, but at the time it seemed really sweet. IE7 seems more like "finally it's out; it is long overdue" as opposed to "yay! IE7 is a revolution!"
Disclaimer: I am no fan of IE. I like FF, Camino / Safari, Opera.