I'm not the only person having these problems, so I thought I'd post the solution here for all...
After hearing that IE8 will be offered via Windows Update next week, I decided to install it on my home PC running Windows Vista. I've been using it since it RTM'd at work with some major stability issues, but I put them down to my machine rather than IE. Oh, how I was wrong!
After the usual install and reboot cycle, I opened IE8. I turned off the usual trash (Accelerators, Web Slices, Compatibility View for Intranet sites, etc.) and went to hide the nasty favourites bar. Only, I couldn't. Right-clicking on the favourites bar didn't give a context menu. So I tried View » Toolbars » Favourites - the option was disabled!
I proceeded to Google, doing the usual middle-click on results to open them in new tabs. Every new tab I opened just sat with "Connecting..." in the tab title. The content was blank.
This isn't looking good...
I swiftly disabled all the non-MS addons (and Fiddler, thinking that could potentially break connections). No change.
I fired up Event Viewer and found an "Internet Explorer" event log. This would be an interesting find if the entire log wasn't blank. Great!
I opened up My Computer and navigated to my system drive. WTF - it opened in a new window. I checked folder options - it's still set to "open each folder in the same window". I don't like that :(
Rolling back to IE7 is now a serious option. This isn't what I've come to expect from Microsoft!
After a little more Googling (using Chrome, ofcourse) I found I wasn't the only one having these issues. Fixes varied from broken addons to GoogleUpdater. Nothing seemed to apply to my problem.
Then I found a magic post. Someoe had run IE as Administrator and discovered his problems disappeared. Even better, when he ran as a normal user afterwards, things still worked! Worth a shot, eh?
Well, it worked. Running as Administrator worked fine. Running again as a normal user and everything continued to work. Specifically, I could now:
- Hide the IE8 favourites toolbar
- Open new tabs without the "Connecting..." message/hanging
- Open Windows explorer folders in the same window
- Access toolbar context-menus
An interesting bug! I can't explain how it could happen, or why any errors/failures aren't written to the event log. All I can say is I'm glad it's fixed and I don't need to roll back to IE7!