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The European Commission (EC)announced on its Web site on July 24 that Microsoft has now proposed as part of settlement talks to allow a “ballot screen“ to be included in Windows 7. Microsoft initially was dead-set against allowing the inclusion of a ballot screen which would prompt users at set-up to select among a number of different browsers, including Internet Explorer (IE) 8, as its legal representatives made clear earlier this year.

The ballot screen was one of the ideas the EC regulators were floating as a possible remedy in the Microsoft vs. Opera antitrust case that Opera lodged in late 2007. The case involves whether Microsoft has harmed consumers and competitors by bundling Internet Explorer with Windows. Microsoft and the EC have been in settlement talks for the past month or so.

More from the European Commission Web site:

“Under the proposal, Windows 7 would include Internet Explorer, but the proposal recognises the principle that consumers should be given a free and effective choice of web browser, and sets out a means – the ballot screen - by which Microsoft believes that can be achieved. In addition OEMs would be able to install competing web browsers, set those as default and disable Internet Explorer should they so wish. The Commission welcomes this proposal, and will now investigate its practical effectiveness in terms of ensuring genuine consumer choice.”

It sounds like Windows 7 E is off the table. Windows 7 E is still seemingly on the table — at least until the EC accepts Microsoft’s new ballot-screen proposal. (See the end of this post for more details.)