I have actually managed to solve the problem myself. Thanks to your excellent education I now understand how to do some things on my own
I did a system restore to get the computer to its state before the IE7 installation. Google is fast again. I am puzzled that a failed IE7 installation can cause such a mess?
I have one question. In C:\Windows the IE7 installation folders are still there and highlighted in blue:
$NtServicePackUninstallIDNMitigationAPIs$
$NtServicePackUninstallNLSDownlevelMapping$
$NtUninstallKB904942$
$NtUninstallKB914440$
$NtUninstallKB915865$
Is it safe to delete these folders?

I did a system restore to get the computer to its state before the IE7 installation. Google is fast again. I am puzzled that a failed IE7 installation can cause such a mess?
I have one question. In C:\Windows the IE7 installation folders are still there and highlighted in blue:
$NtServicePackUninstallIDNMitigationAPIs$
$NtServicePackUninstallNLSDownlevelMapping$
$NtUninstallKB904942$
$NtUninstallKB914440$
$NtUninstallKB915865$
Is it safe to delete these folders?