With me, the text in the button on the taskbar is equal to the text of the window title (the text in the very top blue bar) and that, in turn, is equal to the title on the currently active tab and that, in turn, is equal to the text the website designer has put in the title tag of the page.
For www.yahoo.com that's <title>Yahoo!</title> (excerpt from View>Source). For this (XP) forum it's <title>Windows XP Forum and Discussion - CNET Forums</title> (same).
So ultimately, the website designer determines what you see on the taskbar.
Where does this scheme go wrong with you?
Since installing IE7 the open windows on the taskbar show the url instead of the website name. For example instead of showing 'Yahoo' it says http://yahoo.com. Is there a way to change this?