The mechanism chosen for this was the so-called browser ballot; a selection of browsers will be shown to users, and the chosen browser will be installed and made the default. Initially using an alphabetic list, the ballot was then changed to show the browsers in a random order. With this decision made, the EU finally agreed that this would be the way forward, allowing the company to put to an end its European legal woes.
The ballot itself will be distributed to EU customers running Windows XP, Windows Vista, and Windows 7, via Windows Update. Installing the update will, on Windows 7, unpin the IE icon from the taskbar, and then offer a selection of browsers. The five leading browsers—Safari, Chrome, Firefox, Opera, and Internet Explorer—will be visible on the main selection screen, along with a further seven accessible by scrolling to the right.
The ballot will be offered on a limited basis in the UK, Belgium, and France, with full roll-out beginning on March 1. It will be pushed out as an automatic update (for those who have Windows Update set to install updates automatically), so those running Windows Update in its default, recommended, configuration will see the ballot automatically. The list of browsers offered will be updated every six months, to ensure that the five most widely-used browsers continue to be prioritized.
In addition to offering the browser ballot to existing Windows users, OEMs will be able to preinstall a browser of their choosing and also uninstall IE from machines shipping with Windows 7.
Source: Arstechnica.com