They are "trying" to be more standards compliant, but they just can't seem to resist the urge to put proprietary support in there. Although in 7 and in 8 you can create a gradient for a background using css without an image, which would be really sweet if it worked on something other than IE.
filter: progid:DXImageTransform.Microsoft.Gradient(endColorStr='#ffffff', startColorStr='#bFdCff', gradientType='1');
That won't work on anything but IE6+. It is nice though.
Try putting that in your CSS and check out the result, it's pretty sweet. (for best results make sure the element you're applying it to is a block-level element)
I haven't seen the public version yet, but the beta had a (switch to IE7 if this page looks broken mode... doesn't say much about their own confidence
It's fine for what it does and as long as windows maintains the same market share that it does now (we'll see about that), IE will still be popular with home users who don't even know there is another way to view the interwhos.
With the introduction of chrome however, it will be interseting to see how microsoft will conform once developers stop caring about the users on IE. I don't think it's a bad product, I think that standards compliance is THE BEST way with open technologies to improve and advance. If they continue to make that part of their game-plan, it should begin to do quite well.
*EDIT: oooo, almost 300