At least on my Vista BETA1 build of Internet Explorer 7 (version 7.0.5112.0) the Google IE toolbar does not function correctly (am not the only one, check IEBlog for more information on the toolbar compatibility).
The only reason I use Google toolbar is to have the spell check support. I thought I will use this toolbar with IE7 so that I can have the spell check support before I submit any news to this site.
The installation went fine and it seemed to work fine in all aspects except when you a have form with some data and you wanted to run a spell check. Once you click on Spell check it does display the list of misspelled keywords. And when I click on this misspelled keywords the toolbar does not display any suggestion box as it does in IE6 or Firefox. Also when you click on Spell check, normally it displays a link with “editing disabled during the spell check and stop spell checking” at the bottom of the toolbar; but this is also not displayed on IE7.
May be Google needs to test it on IE7 beta and release a upgrade. I haven’t tried on XP IE7.