Not sure what Firefox deos that IE7 doesn't. I've had it installed for years and never felt the need to try it. Several of the sites I tried on it wouldn't display correctly.
Um the stuff I mentioned further up in the thread If sites don't display in it then they need fixing. Its not Firefox's problem its theirs.
On a very basic level, yes. They both browse websites. However, Firefox is better for developers because of the way it follows W3C standards. For end users Firefox has a huge advantage over IE because of the extensions you can add on to it. You can get extensions that will change the way websites work allowing you to add features that they don't have. Its got great adblocking features too allowing you to view the web as it used to be. Check out the more popular ones..