But my version of MIE still expects ampersands. Which browser uses the newstyle urls?

All browsers support ';' in URLs. It's the application running on the web server that will or will not support ';' vs '&' to separate CGI key/value pairs.

Shouldn't ampersand be the default?

I don't think so. The problem with using & is that it should be escaped in XHTML as &. Since people forget to do this all of the time you get a lot of invalid XHTML around. Using ';' solves the problem.

Since applications built with CGI do support using ';' it makes sense for this to be the default.