In a surprising move Microsoft have removed Internet Explorer from Windows 7 for it's European release to comply with EU regulations that resulted from various anti-trust cases that have been filed against them over the years. Apparently the intention is that PC manufacturers install one or more browsers themselves when building computers using Windows 7. This has been confirmed as being the case by Microsoft and was reported on the cnet News website.
Microsoft doesn't plan to offer the browser-less "E" version outside Europe, but is also offering an option in all regions in which users can hide IE 8, as part of a control panel that lets users turn on and off various operating system components.
This report also shows that the previously argued issues with removing Internet Explorer from the OS were not strictly true or at least have been worked out for this new release dubbed Windows 7 E which is reminiscent of the Media Player-less "N" versions.
The question is though, is it a good thing or a bad thing? For people who are new to computers they're not necessarily going to know about different browsers or even where to get them from and it is those cases where it is good to have a browser pre-installed - even if it is one as dire as Internet Explorer. Of course though it is intended that OEM system builders choose what browser their customers will get and so doesn't make a huge difference to the end user. Other versions of Windows 7 such as the Ultimate edition will continue to include the browser with it.
There may be interesting times ahead for the web browser market.
The way I see it people who build their own systems will be able to acquire their own web browser easily. Those who buy their computers ready to go from places like PC World will likely find it has IE8 pre-installed for them, and perhaps an alternative like Mozilla Firefox as well.
The problem now though becomes which browser vendor has the money to pay for the prime spot on these machines? Judging by Opera's response on CNet over this issue, it's not them. Which probably takes us back to square one again anyway. :)