I think that this is proof that IE8 is "not ready yet"...typical of any microsoft product when it is actually released! Have you tried it with IE7/Firefox 3/Safari etc etc? Does it work in these?
Worth a shot: If you want a quick way of trying out IE7, you need to look at Virtual PC 2007 from MS. Its a free download, and will let you run a seperate XP OS at the same time as your host OS. Might be worth getting hold of some extra RAM which you can assign to the Virtual OS, as it will slow your machine down a bit.
HTH
Mark
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