Thanks to Kawajiri Takeshi, I was able to implement actual streaming for IE6 and 7. I know Jeanfrancois is busy with V1.9 and I thought this was just too good not to share :) .
I've attached my working example (client and server + dependencies). Iv made a few notes in the code and updated the prototype and Comet methods used to reflect the latest versions (Prototype 1.6 Comet Grizzly 1.9) but other than that it's Kawajiri's work (Thanks again!)
Oh and this implementation uses Json, so Iv included that jar as well...
--Richard Corsale