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They are using it to show to the world how serious they are about web services, that is applications delivered dynamically over the internet as opposed to conventional applications stored on a user's computer. To that end they've been showing everyone 'Atlas', their AJAX developing system. Bill Gates gave a keynote earlier today extolling the virtues of Microsoft's new approach to the internet, as well as the usual chatter about forthcoming releases.
If you're particularly interested in more of the happenings at MIX06, there's a load of stuff on Microsoft's Channel9 website here and some Flickr photos here.
You also don't have to be at MIX to get the new build of IE7, and it is downloadable here. It isn't really a major release, just a few bugfixes (such as the inability to use Blogger) which had been irritating users. When I first installed it it was incredibly unstable, lasting on average about 30 seconds before crashing, but it seems to be better now, and so probably is worth downloading. More information at the IE7 blog.