Mystery solved: Why is the Internet Explorer folder in Event Viewer always empty (IE7)?
This is because Application Compatibility Logging is not enabled on your machine. This is completely normal because, by default, IE7 does not enable Application Compatibility Logging.
You can enable Application Compatibility Logging to have a look see at what happens by editing the Registry as follows:
The relevant registry key will look like this:
IE will warn you the first time it is started after Application Compatibility Logging is enabled by displaying the following alert:
In addition, there will be a new icon on your status bar as follows:
When I enabled Application Compatibility Logging the Internet Explorer folder in Event Viewer immediately started filling with data - please do not try to repair IE7 because of the 1037 errors - as far as I know they are NORMAL because ACL is not meant to be turned on via the registry without the Application Compatibility Toolkit also being installed.