actually, i've found IE7 and FireFox to be about the same in memory usage if I use them similiarly (multiple open tabs/sites running in a single process over extended times of browsing without minimizing either window). It may seem like IE7 is using less memory, but be aware also that clicking on the IE icon to launch multiple windows of IE will start multiple instances of the iexplore.exe process which would make each process seem like it's using less memory while multiple firefox windows will almost always still run under a single process ID.
Over time, firefox can use up more RAM depending on the extensions and such in use.. keeping a history of closed tabs will use up more RAM, etc..
Also, IE7 trims memory when it is minimized.. Firefox (by default) does not free memory when you minimize the window. The advantage of not trimming the memory is that when you restore the Firefox window, it tends to restore faster if your system is memory starved. Turning on the trim on minimize can cause Firefox to take longer to restore from the minimized state. The option to trim the memory on minimize can be enabled by following these steps:
1) in a blank window/tab, type "about:config" in the address bar (no quotes)
2) Right-click in the window and select the "new/boolean" option
3) enter "config.trim_on_minimize" as the preference name (again, no quotes)
4) Set the value to "True" to allow windows to reclaim the memory when Firefox is minimized.