The team is continuing to chip away at the big list of issues posted for 1.7 while we do our best at keeping some other balls in the air.
Activity on the mailing lists has picked up quite a bit over the past few weeks - with posts ranging from installation problems to "how do I..." to feedback on improvements and additions. Fortunately, Peter Hirst of Open Social Sites has done an incredible job chipping in and answering quite a few of the support questions. This has really helped the team stay focused on development efforts - major kudos to Peter!
We are also working hard on two consulting engagements - one for QuestBridge's 2007 Colllege Prep Scholarship program, and another for Selection Phase of The McConnell Foundation's Scholarship programs (in conjunction with CivicActions). Both of these projects give us the opportunity to improve the extensibility of CiviCRM for specific vertical markets/applications.
Meanwhile, a number of issues and improvements have been addressed in the current stable 1.6 release, while we've made significant progress towards the 1.7 release (alpha is still targeted for end of February). The 1.7 release queue has 70+ issues, of which 36 are now resolved. You can see the current to-do list here - and the completed items here.