Yes, IE7 has tabs.
In general, I think tabs are a great idea. I liked them a lot in Office dialogs and in Excel in the early 90's. (I used to work on Office, and I admit we almost added tabs to Word at one point.) I like them in Visual Studio. I think, as an industry, we have a ways to go in refining the experience, consistency, and value of tabs.
The tabbed browsing experience in the upcoming IE7 beta is pretty basic. Expect additional end-user functionality to come in after the beta.