We've done some basic security tests, in cooperation with Tom Gilder, on the new Opera 7 beta release and found two major security vulnerabilities. These vulnerabilities are quite obvious and likely to be discovered by malicious users.
Combined, they allow full read access to a victim's file system (including both directories and files) and scripting access to any domain.
Full details will be released once Opera resolves these issues. In the meanwhile, users are encouraged not to upgrade to Opera 7 or disable scripting.