Great news from the IE Blog:

Back in April 2006, we made a change to how Internet Explorer handled embedded controls used on some webpages. Some sites required users to “click to activate” before they could interact with the control. Microsoft has now licensed the technologies from Eolas, removing  the “click to activate” requirement in Internet Explorer. Because of this, we're removing the “click to activate” behavior from Internet Explorer!

I'm not going to comment on the underlying issues that led to IE being forced to make this change in the first place, but I'm glad that it's over. I've been using pre-release versions of Vista SP1, and was thrilled to see this change make it into the builds a few weeks ago.