I have a bit of an issue with IE7's favorites. If you have too many favorites to fit on one screen IE7 splits the favorites into multiple columns of favorites. I think this is a bit of a bad design. I kind of like the old IE6 method; scrolling menus.
Just take a look at this image to see what I mean.
Pretty bad huh. Okay I know that I have a lot of unorganised favorites and I should probably sort them... but still, I can't see the screen, the favorites menu even covers my my toolbar. Argh! :)