Microsoft Australia has stated:
choosing to upgrade to Internet Explorer 7 will not change a user’s default browser from an alternate browser. If IE6 is a user’s default browser and they opt to install IE7, then IE7 will become the default browser. If another browser is the default browser before IE7 is installed, that browser will remain the default after IE7 is installed. The installation of IE7 will not override the user’s preferences or settings.