Here is another question that I answered @ MSDN Forums :

Q : We just tested our sharepoint branding in IE8, but it’s totally messed up!what’s wrong with IE8 ??Did anybody encounter this before ?

A : Generally, there are two choices for rendering mode, “standards” mode and “quirks” mode. In “standards” mode, a modern browser will do its best to render the document according to the W3C recommendations, even if it leads to unexpected results.
In “quirks” mode, a modern browser will try to handle an (x)HTML document like older browsers from the mid-to late ’90s did. It will do its best to imitate the parsing, rendering, and bugs of earlier browsers when encountering sloppy or invalid code authoring. And, it will display those quirky pages in the same way as those earlier browsers do.
So how does a browser decide whether it should use “standards” mode or “quirks” mode? Why, by examining the doctype, or lack thereof on the web page.
IE8 decides its rendering engine based on DocType in the master page:
If IE8 sees a valid DocType declared it will attempt to render a site in IE8 Standards Mode.
If IE8 does not see a DocType it will attempt to render a site in quirks mode
Master pages like default.master that do not have a doctype declared will render automatically in IE8 in quirks mode.
However if you create a custom master page and add a doctype IE8 will try to render the page in IE8 standards mode which will cause some problems like in showing SharePoint dynamic menus .
So if you want to add a DocType, you should add the followint Meta Tag < meta equiv=”X-UA-Compatible” content=”IE=EmulateIE7″> , this will render your page like IE7 Mode.