I'm having the same problem with 3 seperate 2.5 installations (one an upgrade, one fresh) and on two different computers running IE7. Fine in Firefox, Safari and IE6 (bizarrely).
Was having the typical upload problems - resolved by these fixes: Topic: 164999
But the main problem for me is that the popup modal window is appearing at the bottom of the viewport, with 1/3 of the bottom of it cut off by the bottom of the window. IE6/FF/Safari show it perfectly centered, but IE7 it's cut-off and practically unuseable.
To add more confusion to the matter - it displays fine on the standalone version of IE7 that I run on this PC. I think the standalone I have is a pretty old build, so it could be a recent IE7 version causing the problem.
Is almost definitely a problem with the Thickbox used, and have seen a few reports of similar instances: see here
Anyone know of a fix? Better yet, anyone else got the same problem?