Boy, this was interesting. I searched Bing for: [Internet Explorer 7 "stack overflow"], and found a lot of hits. One in particular caught my attention: "recursion that passes through the host global object is limited to a stack depth of 13" [I didn't note the URL but searching for that string should find it in Stack Overflow].
After many experiments, I found that if I enclose the SPServices call that occurs within the writeNew function (above) with:
if(iGlobal < 13) { ...}
then all is well. If I increase the limiter to, say, 15, the application (not the iteration) ends with a "stack overflow" message.
Trying to understand his next sentence, I removed the Crockford module pattern I use with most of the SharePoint JavaScript code, but it made no difference.
Michael