Yes, it is compatible with IE8 Rated 5 out of 5 stars
I've been using this add-on for a couple of years now EVERYDAY and can attest to the fact that it works with IE6 all the way to IE8 with ActiveX, etc. I've never had it crash on me and the only complaint is the memory leak, which isn't really that bad. I've never run out of memory and have not had and memory problems in Windows because of it, just big footprints for Firefox.
I tried IE View and found it to be completely useless for my needs. I don't need an add-on to launch IE. I need IE in a tab that I can switch easily and IE Tab provides this. I switched back to IE Tab after 2 minutes of using IE View.