Back from holidays, catching up with news, I stumbled across the article New Microsoft browser raises Google's hackles. IE7 Beta 2 was released last week, and because it sported an x64 version I installed it yesterday. And immediately tried the search box that Google is complaining about loudly. Guess what - I had it changed to Google (my personal favorite search engine) in seconds (even making it the default search provider):
The UI wasn't all that unfamiliar at all, let's take a look at Firefox (my personal favorite browser):
Note that these are the default out of the box search providers as defined by Firefox, and there is no MSN in there by default at all. But you can add it if you want (just for laughs, check out IE7's as well as Firefox's add engines/providers pages, they look very, very similar indeed).
So, does that constitute the claimed "unfair grab of Web traffic?" No, unless you go the whole nine yards and force every single browser vendor on the planet (including "Old Europe") to ship their products with zero preconfigured search providers. And hey, IE7 will be a separate download, so why doesn't Google add a browser product to their portfolio?