UPDATE 26–10–2006: Scott has posted a fix for this on his Beyond the Paper DWF Blog:
I tried Internet Explorer 7 RC1 & struck problems only resolved by a full System Restore;
Scott has posted the background on why DWF Viewer/TrueView users should avoid Microsoft Internet Explorer 7 RC1.
Autodesk DWF Viewer, Autodesk Design Review, and Autodesk DWG TrueView are not compatible with the Microsoft Internet Explorer 7. These three Autodesk applications use HTML as part of their menuing interfaces and are impacted by Microsoft Internet Explorer 7 operation. Uninstalling Internet Explorer 7 and reverting to Internet Explorer 6 does not restore Autodesk functionality, because the supporting libraries from the Internet Explorer 7 Release Candidate are left in place.
UPDATE 15–10–2006: Should you want to block the IE7 Auto-Update Microsoft have a toolkit;
Toolkit to Disable Automatic Delivery of Internet Explorer 7
The Internet Explorer 7 Blocker Toolkit enables IT Administrators to disable automatic delivery of Internet Explorer 7 as a high-priority update via Automatic Updates and the Windows Update and Microsoft Update sites.