On the issue of stability or vulnerability to attack, 1.7.7 is as safe as any internet software that has had all known bugs fixed. For admins that ban 1.7.7, this isn't (or shouldn't be) an issue.

On the issue of privacy and security - security meaning safety from RIAA/MPAA - some admins believe that 1.7.x versions are compromised, since BitTorrent bought µTorrent at the end of 2006, and BitTorrent has taken a well-known stand against unauthorized file-sharing. As far as I know, no proof of "phoning home" or suchlike has been posted (some early reports of this were traced to DHT), but some admins, who face harassment and lawsuits in the U.S., or arrest elsewhere, are understandably taking the "better safe than sorry" strategy, and banning all versions past 1.6.1, or even earlier.

Based on the facts, the only banning policy that makes no sense whatsoever is allowing 1.7.6, which is vulnerable to WebUI and protocol extension attacks, and banning 1.7.7, which is safe from them.

As far as CZone goes, "Your account might be disabled for fake reasons," is awfully cryptic. I don't know what "fake reasons" means, or if this indicates that they may allow 1.7.7 later. I know of other trackers that ban all of 1.7.x, including 1.7.7, but none that ban 1.7.7 but allow other 1.7.x versions.