Hi Tom,
First, I added some additional text to the description of the issue for IE7, as well as making sure you're running in Inline Windows mode. I also summariesed what you could read between the lines in the issue description, and added some possible workaround options to the desciption.
Second, the scheduling and priority of all issues is always initially set as per our default procedures and then the person responsible for scheduling issues will take over and possibly make some management decisions on changes for the schedule. I have already sent notification about this issue, as there were more persons involved in the narrowing process. At the moment I just do not have information about what version of Visual WebGui the issue will be fixed in. I hope it will be scheduled soon though, so we will know what the general plan is. Please track it for a few days and see what schedule is decided.
Finally, regarding the construction of an inline dialog form in terms of generated Html, then I would like to suggest to you what I think is currently the best place to learn exactly that. If you install version 6.4 on a dev or virtual machine and create a project and then a theme, you can actually view the XSLT for every control in Visual WebGui and see how it is constructed. It's not that hard to learn for the purpose of reading such info as you are asking about.
To answer your question though, then inline dialog forms are created as DIVs, and then within you will of course find a lot of other Html structures, that make up the form and it's controls.
Hope this helps,
Palli