HOTFIX: The InternetQueryOptionW function returns a value of true when you use the INTERNET_OPTION_URL option flag as the second parameter in IE7
This problem occurs because of an error in the Wininet.dll file and does not occur in earlier versions of Internet Explorer.
http://support.microsoft.com/default.aspx/kb/935776
A comprehensive list of IE7 related Knowledge Base articles can be found here:
http://www.ie-vista.com/kbase3.html