Before you uncheck the "Override Automatic Cookie Handling" box, read this excerpt I wrote regarding cookie handling so that you can make an educated decision. The final choice is always, of course, your own.
Setting Up Cookie Handling on IE
Although some people claim it is annoying, I set up my browser so that I have COMPLETE control over the bags and bags of ROTTEN cookies that web sites want to set on your PC.
The bad news (?) about this setting is that everytime you go to a new site, you get an IE popup:
*********************************************************************
* Privacy Alert
*
* The website "www.xxxxxxxxxx.com" has requested to save a file on
* your computer called a "cookie." This file may be used to track
* usage information. Do you want to allow this?
*
* ( ) Apply my decision to all cookies from this website
*
* [Allow Cookie] [Block Cookie] [More Info] [Help]
*********************************************************************
The GOOD news is that you only have to respond to this the first time you go to a particular site that wants to set a cookie; once you have clicked the "Apply my decision to all cookies from this website" box and, either "Allow Cookie" or "Block Cookie," that setting is remembered and IE never asks about the site again.
To set this "Cookie Response" in IE7, go to Tools, Internet options, Privacy, Advanced. Click on:
(x) Override automatic cookie handling
AND click
(x) Prompt for both first-Party and third-party Cookies.
I also UN-click the "Always allow session cookies" box.
You have to use your own discretion here. If you really want to allow the site you are viewing to add a cookie to your PC that could track what you do AND you believe that they really need to know what you are doing in order to provide you with a service, set allow. Personally, I disable cookies if I think that I'm only going to do a "one-time" pass through at the site and won't be a regular visitor. It's nice to not keep too many cookies in my PC's "cookie jar."
Sometimes the very name of the site is enough for one to realize that there is no way that I'm ever going to let the site track me. Included in this category are scumbag sites like doubleclick.net, doubleclick.com, ad.yieldmanager.com, ad-logics.com, adbureau.com, adbureau.net, etc., etc., etc. I think you get my drift. Too bad that IE doesn't have a check box that says:
(x) Would you like to send a nuclear cruise missle to this site?
Do not believe anyone who ever tells you that you have to have cookies globally enabled - it is simply not true. I have been using the above "I Control My Cookies Mode" for close to ten years now and have never had a problem accessing a site that absolutely needs a cookie to function. If you ever find that you do not have functionality at a site, you MAY have a site's cookies blocked. First, check your IE status bar at the bottom right to see if there is a little icon in it that shows an eye with a red slashed circle. If so, doubleclick it and you should get the "Privacy Report" showing the names of the site's cookies that are blocked. You can highlight the site that is blocked, select "Summary", and select one of the three settings for that site about how its cookies should be handled.
Another way in IE7 - go to Tools, Internet options, Privacy, Sites. Scroll down until you get to the one with the name of the site that is being blocked in the Privacy Report. Its setting should be "Always Allow." If "Always Allow" is not that setting, go to the fill-in area under "Address of website:", enter the site name (i.e. xxxxxxxxxx.com) and press the Allow button. This sequence is for IE7 - it may be slightly different for IE6.