Attaching test case which demonstrates problem with IE 7.

Introduce separate variable (not modified by component renderers) that keeps track of which element has focus. Restore focus on DOM update.

Clear focus variable on blur.

This fix doesn't seem to be impacting ICE-4401 and other similar tests positively.

Edit updated 'input' element instead of replacing it. Update style properties individualy so that IE will render new style since element.setAttribute('style',...) doesn't work as expected.
There's a simpler solution described here but it does not work in IE7: http://www.quirksmode.org/bugreports/archives/2005/03/setAttribute_does_not_work_in_IE_when_used_with_th.html .

Note that the way that input elements were being updated was changed in 1.7.2 for ICE-3335. Back then instead of just updating attributes the entire element was replaced as a mechanism to work around IE not updating the rendered output based on changes to the style attribute on the element.

However, this change resulted in other undesired side-effects, such as focus being lost in IE after the input element was updated in certain cases. The new fix keeps the original elements, so avoids the focus loss issues, but uses a new technique of changing the style attribute via the JS API instead of just updating it in the DOM, which solves the issue of IE not interpreting the new style values when they are updated.

enhanced testcase