Based on several posts to the microsoft.public.internetexplorer.general newsgroup I looked at this morning, I've found a partial solution to this issue. One possible cause of the long "Connecting..." time in IE7 is the load time of the browser's add-ons.
I took a look at the active add-ons in my copy of IE7 (at Tools | Options | Programs tab | "Manage add-ons" button).
Somewhat to my surprise, I had as many as 30 or 40 add-ons enabled (among the 4 add-on categories shown in the dialog). Probably 80% of the add-ons were labeled as being from Microsoft and which I didn't remember installing; the other 20% were 3rd-party add-ons that I did remember installing -- things like Sun's Java plug-in, Google Toolbar, Macromedia Flash Player, and Adobe Acrobat Reader.
As an experiment, I tried disabling all of the enabled add-ons. I didn't know whether disabling the Microsoft add-ons would break my IE7 and result in it being unable to display web pages correctly, but I figured that in the event that it broke, I could always go back into the Options menu and re-enable extensions until IE7 was working again.
The experiment was a success! IE7 now initially starts up a lot faster, and I can immediately paste in and navigate to an URL via keyboard (Alt+d to focus the address bar, Ctrl+v to paste, Enter to navigate) as soon as the IE7 window appears.
Further, even with all add-ons disabled, I haven't run into any problems with displaying web pages in my brief testing so far. IE7 even displays XML documents correctly despite my having disabled many Microsoft add-ons with names like "XML Document".
I would imagine that I might need to re-enable at least some 3rd-party add-ons to view certain websites (like the Flash add-on for sites that use Flash), but for now, I am happy to use IE7 extension-free -- the delay in startup time was a significant annoyance for me. On the other hand, I could just use Firefox to view Flash sites and other sites requiring similar 3rd-party extensions; my copy of Firefox doesn't have any issues with startup time despite loading several extensions at startup.
I'm not sure why IE7 has this addon-related issue with startup time when IE6 did not. Perhaps one or more of my add-ons which were optimized to run in IE6 just perform really badly under the new IE7 engine, and future versions of the affected add-on(s) will address this.
One of the newsgroup posts I looked at also pointed to a built-in shortcut which runs an instance IE7 with all extensions automatically disabled for that instance; this is accessed (in Windows XP) from Start | All Programs | Accessories | System Tools | "Internet Explorer (No Add-ons)". Interestingly, when I launch IE7 from that shortcut, it is still affected by the "[Url] is currently unavailable" issue that my original copy of IE7 was affected by when attempting to immediately navigate to an URL when the window opens. This may be because opening IE with that shortcut brings up a window with a special "Internet Explorer is currently running without add-ons" homepage (including a yellow "information bar" at the top of the screen), whereas my normal IE homepage is a simple, quick-loading .html page hosted on my local machine.
If your copy of IE7 is starting up slowly with the "Connecting..." message, you may wish to examine the IE add-ons that you have running (Tools | Options | Programs tab | "Manage add-ons" button) to see whether one or more of them might be the culprit.
Update 2/3/2007: In the course of the past several days, I've had to re-enable several of the IE7 add-ons that I'd disabled to get various websites to work properly. Unfortunately, this has caused IE7 to mostly revert to the slow startup behavior, even though the majority of the add-ons that I had disabled remain disabled.
I've updated the title of this post to read "Partial Fix" instead of "Fix", as it seems just disabling all available IE7 add-ons to address the slow startup problem isn't a very good solution (since many web pages need one or more add-ons to work properly).
This issue is enough to make me hesitant to recommend upgrading to IE7 for any power users running Windows XP who hasn't yet upgraded from IE6. I say "power users" here because typical users are probably less likely be bothered by the extra startup delay -- it could easily be attributed to a part of the load time for the user's homepage if they don't attempt to immediately navigate to a different page, as I was doing when I first ran across this issue. And power users are likely to be already running Firefox or another alternative browser, and thus don't need to install IE7 to gain access to features like tabbed browsing and PNG alpha transparency support.
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