It would seem that the latest beta version of Internet Explorer 7 is not affected by two recent flaws in Internet Explorer 6. The first flaw was more of an annoyance because it would cause your browser to crash but the second flaw is serious and can lead to code execution. This doesn't necessarily mean Internet Explorer 7 is fundamentally superior because it's way too early to tell, but it does indicate that the code for IE7 is significantly different from IE6.
But IE7 is not in the clear and has had its own flaw discovered by Tom Ferris which is fixed in the current beta of IE7. According to Ferris, the "workaround" for the flaw that he discovered was to "use Mozilla Firefox". It should be noted that the flaw was for an earlier beta version of IE7 and beta software is beta for a reason.
Whether or not the official version of IE7 makes a positive impact on the Windows XP landscape remains to be seen. Then again we have Firefox to thank for forcing Microsoft to produce IE7 for Windows XP in the first place. IE7 running on Windows Vista however would have real and tangible benefits over any existing browser running in Windows XP.