Hot on the heals that Microsoft knew of XBox deficiencies is a new finding that IE has a gaping hole in security, which leads to lots of wonderful things. http://ca.news.yahoo.com/s/afp/081216/technology/us_china_it_internet_software_crime_microsoft.  I wonder if Microsoft knew of this problem with IE7, but just decided to release it anyway.

According to reports, this is a case where hackers found the exploit before Microsoft did, that's why they're scrambling for an emergency patch.