Microsoft decided to ship Windows 7 without Internet Explorer 8 for customers inside European Union, Switzerland and Croatia. While this seems similar to "N" versions of Vista, there is small but significant difference - there will be no full version of Windows 7 available in those countries.
For those who wish to read little bit more, there is Microsoft's statement and European's Commission reply to it. I will not go too much into politics of this, although initial European Commission proposal of bundling competition's browsers inside Windows 7 seems highly idiotic to me. Why on earth would anybody accept this?
When error occurs in Firefox (although we all know that Firefox doesn't crash), who will get support calls? If customer got Firefox with Windows, he will call Microsoft since probably 90% of them will have no idea that Mozzila even exists. When they fail to get an answer, they will be angry at Microsoft since, in their mind, this is Microsoft's problem. The only winning move is not to play, and that is exactly what Microsoft did by removing IE.
Although I am Croatian MSDN subscriber (thanks Marc), I hope that this decision will not affect me and that I will still be able to download normal version of Windows 7 with IE. I do want Internet Explorer on my computer (although I have Firefox and Chrome also installed).
I also hope that full version and "E" will share same key. Since they are essentially the same, probably nothing in license will forbid installing Windows from full DVD instead from crippled one. I would use this to install Windows on other people's computers. It saves me time installing all necessary programs and they can download whatever browser they prefer later.
If everything else fails, I hope that I will at least get option to install it via Windows Update (which is conveniently separated from browser since Windows Vista). This will at least allow me to install it with patches.
Final result will be known on August, 22nd.
[2009-06-26: Because of compliance, it seems that upgrade will not be available in "E" version.]
[2009-07-24: Microsoft proposed "ballot screen" selection to European Commission. Internet Explorer would come with Windows 7 and other browsers will be offered for download after installation.]