Although the discussion at the following link is a year old it does shed light on some of the issues which continue to persist and are not going to be addressed just by the release of IE-7.
http://www.circleid.com/posts/in_pursuit_of_idn_perfection/
And, this is a more recent discussion thread:http://www.circleid.com/posts/testing_internationalized_domain_names_idns/
And,
So, once again the argument is not whether one day IDNs will be commonly used in many parts of the globe and hence would be valuable BUT rather in what shape and form they'd be finally implemented and whether current speculative practices carry too much of a financial risk to engage in especially for folks like myself who have limited speculative budgets.
http://www.circleid.com/posts/in_pursuit_of_idn_perfection/
Many of the problems of IDNs come from trying to do multiple languages at the same time or languages one can’t read. The biggest difficulty is implementing them in gTLDs like .com or .org. I think that if we focus on helping the country level TLDs (ccTLDs) get going with IDNs in their own native languages, we would be solving the problem for 80% or so of the people.
And, this is a more recent discussion thread:http://www.circleid.com/posts/testing_internationalized_domain_names_idns/
I thought it might be useful to make clear the distinction between the tests (which are testing mechanisms for IDNs) and the very difficult policy questions that confront ICANN. ............The policy decisions—whether existing gTLDs or ccTLDs should control their script “equivalents” (and how to decide what an “equivalent” is) haven’t been made, and won’t be until the results of this test are known and can be evaluated............And even once the tests are over, it doesn’t seem as if a single uniform global decision (either DNAME or NS-records) will necessarily result. These two methods aren’t mutually exclusive...........
And,
The policy and politics of IDNs far outweigh the scope of the technical tests.
One wrong notion being propagated in the community is that DNAMEs will continue the legacy of existing operators, while NS will allow new players in. Therefore, some say, DNAME should be (or not be, depending on your point of view) used.
The technical tests will help establish what is feasible operationally; but they will not determine which paths to follow in multi-lingualizing the DNS.
So, once again the argument is not whether one day IDNs will be commonly used in many parts of the globe and hence would be valuable BUT rather in what shape and form they'd be finally implemented and whether current speculative practices carry too much of a financial risk to engage in especially for folks like myself who have limited speculative budgets.