Except in the fossilised world of Microsoft, browser innovation is alive and well.
Apple injected cash into the khtml core producing the jolly good Safari browser, and in the process improved Konqueror. A lot of people with Macs seem very proud of this browser, and the KDE community seem equally proud of their much improved Konqueror.
Opera is also moving ahead. After a long hiatus the 7.5 version (currently at beta 3) will also run on the Mac as well as Linux, BSD, Solaris and Windows. The existing 7.x version is a very good browser, small and fast, and the 6.x version is very popular on mobile phones and other small devices. The Opera Browser may not be open source, but it's a fine standard compliant browser family, and it's presence does help to stimulate innovation.
The Mozilla Foundation have been busy of late too, Firefox continues to evolve and innovate, and this week it's more sedate parent, The Mozilla Browser Suite had another beta release.
I feel really sorry for the great "unwashed" masses stumbling about the Internet with their primitive, buggy, non-compliant, insecure Microsoft Internet Explorer. I also feel sorry for me, I have to take my nice clean designs, and then hack and patch them to death to get them to work on this dinosaur of a product.
I'm well aware that there are other Mozilla Gecko based and other independent browsers as well, but I don't know enough about them to comment. I gather some of these are also very good.