I've been using Firefox for some time now and I really like it. However, being a technology junky, I felt compelled to install IE 7 as soon as it was released (I tend to avoid betas if at all possible).
IE 7 definitely feels like a modern browser. It has tabbed navigation, redesigned and streamlined toolbars, and a built-in RSS feed reader (though I plan on continuing to use Thunderbird for the RSS feeds I subscribe to). IE 7 also has the ability to add extensions, however, I haven't found any that I want to use (where's the Bork Bork Bork! translator?) and most of them cost money.
Firefox still has some very compelling features (specifically a better selection of extensions), however, I think I will stick with IE 7 for now (at least until Firefox 2 is released :).