Today I downloaded and installed Internet Explorer 7 (IE7) into my MOSS2007 VPC image, and although nearly everything seemed to work properly after the install, I found that every time I tried accessing MOSS, IE7 prompted me to log in:

That quickly became a huge pain in the @ss, so I started tearing into the security options in IE7:

In the Internet Options dialog box, I went to the Security tab, selected the Trusted Sites icon, then clicked the Sites button:

The Trusted Sites dialog box displayed the http://vpc01 website (the URL for my portal), just as I expected, except the https option near the bottom was selected; I deselected it:

Next, I returned to the Internet Options dialog box and selected Custom Level to view the security settings for the trusted sites:

Eureka! I guess IE7 decided to change the logon setting to Automatic logon only in Intranet zone, so I changed it back to Automatic logon with current user name and password:

I then restarted the IE7 browser, and voila!... no logon prompt.

Hope this helps in your world!