CiviCRM v1.7 is proceeding at a good pace. We've closed most of the issues with just a couple that are still open. We've also got a public sandbox that the community can use and test out various features of v1.7. Hopefully this will also allow us to collect a few more bug reports and issues. We definitely would like to see the community step up and play a more crucial role with testing the product before the beta and final release.
If things continue at this pace, I suspect we'll push out a beta candidate mid next week. At that point, we'll also switch demo to using CiviCRM v1.7 and make v1.7 the default download. In the past this has enabled us to catch a few more issues before we do a final release.
We are starting to think about priorities and focus for v1.8. The current list is on the wiki at: CiviCRM v1.8. Please feel free to comment and add your suggestions and feature requests