Hi,
IE7 won't accept that a bottom margin will take note of the viewport. A bottom margin only applies to an element underneath the element concerned. As there is no element under your footer then the bottom margin on the footer has nothing to push away and so has no effect.
To make space at the bottom of the viewport simply add some padding bottom to the body element instead.
You also need to kill the margin on the p element in the footer as that stretches the footer height in IE7 also.
Code:
body{padding-bottom:50px}
#footer {margin-bottom: 0;}
#footer p{margin:0}
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