I've previously mentioned the Acid2 test designed for browser developers to test against.

Chris Wilson, who leads the web platform at Microsoft, provides an update on the progress IE7 is making with respect to standards (I'm quoting the whole section related to the standards as single sentence out of context could be easily misconstrued) :

"I want to be clear that our intent is to build a platform that fully complies with the appropriate web standards, in particular CSS 2 ( 2.1, once it’s been Recommended). I think we will make a lot of progress against that in IE7 through our goal of removing the worst painful bugs that make our platform difficult to use for web developers.

In that vein, I’ve seen a lot of comments asking if we will pass the Acid2 browser test published by the Web Standards Project when IE7 ships. I’ll go ahead and relieve the suspense by saying we will not pass this test when IE7 ships. The original Acid Test tested only the CSS 1 box model, and actually became part of the W3C CSS1 Test Suite since it was a fairly narrow test – but the Acid 2 Test covers a wide set of functionality and standards, not just from CSS2.1 and HTML 4.01, selected by the authors as a “wish list” of features they’d like to have. It’s pointedly not a compliance test (from the Test Guide: “Acid2 does not guarantee conformance with any specification”). As a wish list, it is really important and useful to my team, but it isn’t even intended, in my understanding, as our priority list for IE7.

We fully recognize that IE is behind the game today in CSS support. We’ve dug through the Acid 2 Test and analyzed IE’s problems with the test in some great detail, and we’ve made sure the bugs and features are on our list - however, there are some fairly large and difficult features to implement, and they will not all sort to the top of the stack in IE7. I believe we are doing a much better service to web developers out there in IE7 by fixing our known bang-your-head-on-the-desk bugs and usability problems first, and prioritizing the most commonly-requested features based on all the feedback we've had.

I do want to be clear that I believe the Web Standards Project and my team has a common goal of making the lives of web developers better by improving standards support, and I’m excited that we’re working together to that end."

The full post details bugs fixed and added feature support.

Molly Holzschlag of the Web Standards Project comments:

"While it doesn't hit everything we might like, and we won't see most of it until Beta 2, it's a pretty impressive list for a release that by all accounts is primarily about security and UI features."