The first time IE7 launches it loads a setup page, which reappears each time if not completed. Unfortunately the traffic seems to have knocked out the MS servers, so the page is responding extremely slowly. Also, IE freezes with 100% cpu usage if the page only partially loads (making a *great* first impression), probably because of the unique way that the page interfaces with IE’s settings.
So it might be worth waiting until the US is asleep before installing, or at least giving it a few hours. Anybody with the problem can try accessing the setup page directly, instead of through IE’s forward.