Jane Kim, program manager for RSS in Internet Explorer, has written a useful post detailing the new RSS features in IE7. A few comments from me...
1) Microsoft has decided to call RSS "web feeds", at least for now. Jane says they're "still actively exploring what is the right name to use for RSS feeds". Although I agree that end users need not be concerned with knowing what RSS is - they just need to see the benefits of syndication and subscribing to information - I don't think 'web feeds' is any clearer than 'RSS'. Personally I think RSS and its orange branding has gotten too much traction on the Web already and it's too late to change it now.
Don't mess with the brand Microsoft - it's bigger than you. Even the Atom proponents admit that RSS is the brand name.
2) Discovery: "If a web feed is found, the web feed button on the toolbar lights up." Additionally it can play a sound. Bing! This is good stuff - it will help promote RSS feeds to normal Web users if it is highlighted in this manner. Apparently publishers will be able to control this setting. Naturally the user also can tweak their browser settings.
3) That format thing: "Beta 1 of Windows Vista and IE 7 for XP currently supports the web feed formats RSS .9x, RSS 1.0, and RSS 2.0. As Sean mentioned, Atom 0.3 and Atom 1.0 support will come in a later release."
I suppose the Atom folks will be slightly miffed. But how many feed-enabled blogs and websites don't have at least one varient of RSS .9x-2? (I actually don't know the answer to that, so someone feel free to enlighten me).
4) IE7 will display a browser-friendly version of the RSS feed - much like Feedburner does with my RSS feed. Again, this is a good way to make sure RSS gets adopted by the mainstream.
Not a bad start by Microsoft. It doesn't appear they have all the functionality they promised at Gnomedex ready to roll out yet - e.g. there was no mention of support for Simple List Extensions. This Beta 1 seems to be aimed at users, rather than developers. Having said that, there was also little mention of the RSS Reader functionality that IE7 will have. I expect we'll hear more soon.