This information is derived from the IE7 blog
"Yes, IE7 has tabs.
In general, I think tabs are a great idea. I liked them a lot in Office dialogs and in Excel in the early 90's. (I used to work on Office, and I admit we almost added tabs to Word at one point.) I like them in Visual Studio. I think, as an industry, we have a ways to go in refining the experience, consistency, and value of tabs.""The tabbed browsing experience in the upcoming IE7 beta is pretty basic. Expect additional end-user functionality to come in after the beta."
"I think we made the wrong decision here initially, and we’re making the right one now."
In my opinion, the bigger issues that M$ IE needs to handle are concerning security vulnerabilities and web standards. But i think those are not on their immediate 'To-Do list' ...