IE8 is much nicer than IE7, and basically a top-tier browser at this
point -- MS is learning. Of course, the problem with IE now behaving
"properly" and obeying standards is that many sites assume that it
doesn't! :-) Part of the compatibility flag you mention (the broken page
icon by the refresh button) is there to force IE8 to behave more like
IE7.

NB: Even if you're not planning on running IE8 yourself, you should
understand the new compatibility setting and how they impact your site,
if you're responsible for a website. It's possible to add a HTTP header
or meta-tag to tell IE8 to always act like IE7 if you have issues. Also
note, the upcoming (and awesome) Window 7 release ships with IE8 so it
will be out there soon -- I'd guess this holiday season.

-Walden


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