Microsoft has released a toolkit to disable automatic delivery of Internet Explorer 7

To help our customers become more secure and up-to-date, Microsoft will distribute Internet Explorer 7 as a high-priority update via Automatic Updates for Windows XP and Windows Server 2003 soon after the final version of the browser is released (planned for fourth quarter 2006). Microsoft is making a non-expiring Blocker Toolkit available for those organizations that would like to block automatic delivery of Internet Explorer 7 to machines in environments where Automatic Updates is enabled.

Note:
The Blocker Toolkit will prevent machines from receiving Internet Explorer 7 as a high-priority update via Automatic Updates and the “Express” install option on the Windows Update and Microsoft Update sites. The Blocker Toolkit will not expire.
The Blocker Toolkit will not prevent users from manually installing Internet Explorer 7 as a Recommended update from the Windows Update or Microsoft Update sites, from the Microsoft Download Center, or from external media.
Organizations do not need to deploy the Blocker Toolkit in environments managed with an update management solution such as Windows Server Update Services or Systems Management Server 2003. Organizations can use those products to fully manage deployment of updates released through Windows Update and Microsoft Update, including Internet Explorer 7, within their environment.

See the "Additional Information" section below for detailed instructions on configuring and deploying the Blocker Toolkit. The same information is also provided in the Help file included in the download.

Toolkit to Disable Automatic Delivery of Internet Explorer 7