Here's a section of my address book:

I edit the label on the "lessthan 1" entry:

And then it shows up twice:

Restarting bitcoin-qt fixes it so it only shows up once again.

I tried reproducing this with a new wallet with an empty address book, but couldn't.

I built against the v0.7.0 label in git. The logfile claims I'm running:
Bitcoin version v0.7.0rc3-dirty-beta (2012-09-12 14:07:22 -0400)

I expect rc3 is the same as the final release.