that the Windows 7 installer will ask you to select the browser of your choice from a list. It will then use your internet connection to toddle off and download the latest compatible version, and install it as part of the Windows installation routine.
My guess is that Microsoft will have copies of the latest compatible versions of the various browsers sitting on its own European servers, ready for the expected high volume of downloads.
Microsoft have said "In the wake of last week's developments, as well as continuing feedback on Windows 7 E that we have received from computer manufacturers and other business partners, I'm pleased to report that we will ship the same version of Windows 7 in Europe in October that we will ship in the rest of the world.
One reason we decided not to ship Windows 7 'E' is concerns raised by computer manufacturers and partners. Several worried about the complexity of changing the version of Windows that we ship in Europe if our ballot screen proposal is ultimately accepted by the Commission and we stop selling Windows 7 'E'. Computer manufacturers and our partners also warned that introducing Windows 7 'E', only to later replace it with a version of Windows 7 that includes IE, could confuse consumers about what version of Windows to buy with their PCs.2
Microsoft won't have the last say - there's an EU decision pending, and only last week the European Commission issued a press statement saying:
"The Commission welcomes this proposal [that there would be a browser option in the installation routine], and will now investigate its practical effectiveness in terms of ensuring genuine consumer choice."
The bracketed text is mine.
Eventually the Commission will issue a decision, and if it accepts the browser list proposal Microsoft will have no choice - the European version of Windows 7 will have to be different from all others if it is to be allowed on sale in EU countries.
As a mere consumer of such products I am happy with the outcome of a ballot screen. I have found the exchanges between MS and the EU most interesting not the least because the consumers interests appears to have taken, or rather been given, a back seat at times.