I got a reply from someone at Google, who said they were aware of the
problem (of Internet explorer) and the "display secure and nonsecure
items" problem and they told me the available solutions were:

a) Have customers use a different browser (basically Firefox -- the
only one I found that works.. IE and Opera both have problems w/
Google CHeckout)
b) Tell customers to lower their browser security settings.  (Which is
kind of ridiculous -- asking customers to lower the default security
settings of browser???)

Clearing the IE browser cache/history/cookies does not fix the
problem.  Additionally, I LOWERED the security settings of Internet
Explorer 7 from "Medium-High" (the default setting) to just
"Medium" (lower than "medium-high") and I still experienced the
annoying "display secure and nonsecure items" when tabbing or clicking
on the Address lines underneath Cardholder Name during Google
Checkout.

I cannot believe no other Google CHeckout merchants have responded to
this post, either acknowedgling this problem or suggesting ways to fix
it. I have tested other Google merchant websites and I have the same
problem using Internet Explorer 7.  I would think there were more
Google Merchants using and testing their site using IE7....

Thanks
Ralph

QUOTING THE MESSAGE I RECEIVED FROM GOOGLE
========================================================
Hello Ralph,

Thank you for your reply. I understand customers are still seeing a
security message after they've cleared their cache and cookies when
using
Internet Explorer.

It sounds as though your buyers have their browser security settings
very
high, and a result, are seeing this message. To resolve this issue, we
suggest that your buyers use a different Internet browser and edit
their
security settings. We apologize for any inconvenience this may cause.

We greatly appreciate any feedback or suggestions for ways we can
improve
Google Checkout. Your comments provide us with the assistance we need
to
optimize our program, so please continue to send us your feedback.

...
========================================================