I just run a copy of XP inside VirtualBox to test things in IE. It's not application level virtualization, but I definitely don't care what happens to the registry, as I can just swap in a fresh disk image whenever I want.
I love VirtualBox, but it's takes up a lot of space to keep several XP images on my notebook. The fact that this lets you test in IE5.5 through IE8 on a single image is a nice win, IMHO.