It seems that there may be agreement between the European Commission and Microsoft to Windows 7 being released in Europe with Internet Explorer 8 present, but with consumers being offered a "ballot screen" which would allow them to simply select from a list of other web browsers. This would set the chosen browser as default and disable Internet Explorer.
This would mean that the issues that I discussed in my previous post about Windows 7 E would go away as the versions of Windows 7 shipped in Europe would share the same functionality as the rest of the world out of the box, which is a positive step. PC manufacturers would still be free to choose to pre-install any browser(s) that they choose to be the default of the machines they ship in Europe.
The proposal states that the ballot screen will be populated with up to 10 of the most used web browsers (with a usage share of at least 0.5% in the European Economic Area, and only one version per vendor), with the top 5 being given prominence. The proposal also includes a commitment to bring the ballot screen retrospectively to XP and Vista via Windows Update.
[UPDATE] Microsoft has now confirmed that it is scrapping the E editions and Windows 7 will ship in Europe with the same versions as the rest of the world, with the addition of the ballot screen.