Moodle 2.0 HEAD - group selector dropdowns do not work in IE7, the most popular browser on the planet. They don't work in IE8 either, and probably not IE6 too (fewer people care about that last).
1) Go to a course
2) If the course doesn't have any groups, create some
3) Create a forum, set to separate groups mode
4) Go to the forum and change the group dropdown using the following methods:
a) Tab to the dropdown. Use arrow keys to change the setting. Press Tab or Return to confirm the selection.
[NOTE: Pressing Tab or Return when the selection has not changed must have no effect; using arrow keys must not jump to a page until user press Tab/Return.]
b) Use mouse to select an option from the dropdown
The code is different in 1.9 (and broken in a different and less obvious way), I will fix that one personally under a different bug number