Sessions wont work with IE7 with 2.0.2?

I have an odd problem I don't ever remember having before.

If I access my app with Safari or Firefox, I can login and maintain a
consistent session. Tailing the log file, I see the same session ID
evertime I hit my apps pages.

Now, I open up IE7 on my PC. I try to login, and the server thinks the
login worked fine, but after I get redirected I am not logged in. After
further investigation, every single hit from my IE7 generates a new
session with a new session id.

It's like IE7 refuses to accept a cookie from this site. The odd part
is that I have a 1.2.3 version of the site running fine in production
right now. The only thing I can think of that changed is upgrading to
Rails 2.0.2. We are using ActiveRecord store for both apps, since the
session might get a little bigger than 4K.

Any ideas? This is stumping me. Also are there any good tools for
testing when cookies are set and cleared?