HOTFIX: A site does not run in the expected security zone in IE7 if the site address in the security zone uses a wildcard character
Symptom 1
A site address that uses a wildcard character overrides a site address that uses the exact name. For example, assume that you have added the "*.subdomain.domain.com" site address to the Local Intranet security zone. You also add the "server.subdomain.domain.com" site address to the Trusted Sites security zone. When you access the following Web site, you expect the Web site to run in the Trusted Sites security zone:
http://server.subdomain.domain.com
However, the status bar of Internet Explorer indicates that the Web site runs in the Local Intranet security zone.
Symptom 2
A site address that uses a wildcard character does not apply to a site address that is in a nested namespace. Instead, the site address that uses a wildcard character applies only to a site that is directly in the defined namespace.
For example, assume that you have added the "*.subdomain.domain.com" site address to the Local Intranet security zone. When you access the following Web site, you expect that the Web site will run in the Local Intranet security zone:
http://server.dns.subdomain.domain.com
However, the status bar of Internet Explorer indicates that the Web site runs in the Internet security zone.
In this case, the Web site runs in the Local Intranet security zone only after you add the following addresses to the Local Intranet security zone:
• *.dns.subdomain.domain.com
• server.dns.subdomain.com
Note The Web site runs in the correct zone in Microsoft Internet Explorer 6.
IMPORTANT INFO FOR HOTFIX WITH WINDOWS SERVER 2003
To apply this hotfix, you must have Windows Server 2003 Service Pack 2 installed on the computer.
IMPORTANT INFORMATION FOR HOTFIX WITH WINDOWS XP
To apply this hotfix, you must have Windows XP Service Pack 2 installed on the computer.
WINDOWS VISTA - No prerequisites
http://support.microsoft.com/default.aspx/kb/939940