[JamesZ]

It certainly does not seem encouraging. But IE7 is not the answer, anyway. It is the developed IDN websites that will finally lift off IDN.
Someone may argue that without IE7, people do not have the motivation to develop IDN websites. But the problem is good IDNs are owned by a small number of people who do not have the resources and energy to develop all those IDNs. Even everyone has IE7 now, when they type in a IDN they see an empty page or a parked website. They will stop typing in and start using search engines, which are pretty good nowadays and keep improving. So eventually, as IE7 penetrates, we will likely not see the same direct traffic as in ascii domains. Unfortunately, the current market value of domains are largely based on the direct traffic.