Many IE7 users complained that the media uploader in WordPress 2.5 is completely broken. But thankfully, Toby Simmons from Simmons Consulting found the bugs, which are two commas that made IE7 scream. Follow the link below for instructions on how to fix it:
http://www.simmonsconsulting.com/wordpress/2008/03/29/wordpress-25-file-uploader-and-ie7
