Sure, I do. If you present IE with a URL say http://localhost/index.php so it gets the contnet to display and after you changed the setting it is pointed to the same URL but non-existing in the new site, it will have only two choises: display 404 error or cached content that it thinks corresponds to that same URL (http://localhost/index.php in our case) . As far as I see IE7 prefers cached content until you refresh with Ctrl-F5.
In a real world scenario you need to have correct URL in the InitialUrl setting and appropriate handler for 404 error in the [ErrorHandlers] section.
So there is no problem, as far as I see and there is no lie in our documentation.

Ah, so it was caching Ok then, I concur, the documentation was not lying

If I may be so bold as to make a couple of suggestions for docs to be publish for Dock asap:
1. Short guide/procedure for how to setup Dock for one's own app (the above issue should typically be mentioned, as well as the wrong distro dll for php lovingit mentioned)
2. And, a short guide of how to package Dock for redistribution: For ex, currently my Dock install folder shows 60MB of files While the Dock install was 9MB. Is the 30MB php5.2 MSI really necessary for my own distro? What can be left out, what not, etc...

Thanks for all the help!