My company has a little widget that plugs into shopping carts. We are running into a problem where setting cookies in IE7 is not working. This is happening because we are
There is a very insidious Internet Explorer 7 bug to be aware of: on a 304 ("Not Modified") request inside an iframe the P3P header will not be sent by the web server as per the RFC (unless you are using IIS, which doesn't care about such things). IE7 will actually delete any cookie set during that specific request.
This will have the effect you describe above so perhaps that's what's going on. IE6 & IE8 (and every other browser) work as expected.