I just noticed Microsoft posted the MSN Weather Add-in for MSN Search Toolbar. Seems eerily similar to Forecastfox.
That's after IE 7 Beta 1 copied all of Firefox, down to the little RSS feed icon (which they did turn 45 degrees counterclockwise). The only slick feature I noticed in IE 7 Beta 1 is the anti-phishing toolbar's link to Windows Antispyware. Microsoft please do more of this type of stuff!
On the standards front, at least the most egregious CSS errors have been fixed. Note that the post I just linked to has 448 comments as of this writing.
I guess falling as far behind as it has, IE has to achieve feature-parity (which means lots of copying) before starting any ambitious goals of crushing Netscape Firefox. Personally I'm glad. We saw what happens when Microsoft doesn't have a real competitor; IE languished for 4 years. But I hope the W3C and other web standards organizations will reign in the over-enthusiastic addition of useful features such as the blink tag.